USD/JPY remains in a cautious bullish phase despite recent soft US inflation data that initially weakened the dollar. The ongoing US-Iran conflict and rising oil prices sustain inflation risks, preventing a sustained dollar decline and supporting the greenback. The yen faces depreciation pressure amid these developments, although Japanese authorities' interventions have temporarily slowed the slide.

Technically, USD/JPY is consolidating below 162.85, with key supports at 161.50 and 160.50 offering potential buying opportunities. Traders should monitor upcoming US economic data and geopolitical developments, as prolonged tensions could push the pair to new highs or trigger sharp corrections.