USD/JPY is back under pressure as Bank of Japan (BoJ) Governor Haruhiko Kuroda unexpectedly alters the outlook for monetary policy, with the pair at risk for further losses as a bear-flag formation unfolds.

During the confirmation in front of parliament, Governor Kuroda pointed out that the board will have to think about exiting the Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control in fiscal 2019 as the BoJ appears to be on track to achieve the 2% inflation-target over the policy horizon. The sudden change suggests the BoJ will deliver a less-dovish statement at the next interest rate decision on March 9, and the broader shift in USD/JPY behavior may continue to take shape over the coming months Governor Kuroda and Co. approach the end of their easing-cycle.

Nevertheless, the key event risks lined up for the first full-week of March may shake up the near-term outlook for USD/JPY as Fed Governor Randal Quarles, New York Fed President William Dudley, Fed Governor Lael Brainard and Atlanta Fed President Raphael Bostic, all 2018-voting members on the Federal Open Market Committee (FOMC), are scheduled to speak ahead of the U.S. Non-Farm Payrolls (NFP) report, and a slew of hawkish rhetoric may help to limit the recent decline in the dollar-yen exchange rate as it boosts bets for four Fed rate-hikes in 2018.

USD/JPY Daily Chart