Despite reaching its highest level since early December on Monday, the Japanese yen (JPY) remains weaker against the U.S. dollar in early European trading. Bank of Japan (BoJ) Governor Kazuo Ueda signaled a willingness to increase government bond purchases if long-term interest rates rise significantly. This has led to a decline in Japanese government bond (JGB) yields, driving some intraday JPY selling and helping USD/JPY recover from an earlier dip below 149.00.
Expectations of rising inflation and sustained wage growth in Japan have strengthened investor confidence that the BoJ will raise interest rates more aggressively. This limits bearish bets on the JPY. Meanwhile, renewed selling of the US dollar (USD) offsets the USD/JPY pair’s recovery, despite the Fed’s hawkish stance. As a result, confirming a bottom in spot prices requires strong follow-through buying.
From a technical standpoint,
Any upward movement is expected to face strong resistance around the 150.00 psychological level. Continued buying could push the USD/JPY pair toward the 72 EMA on the 4-hour timeframe at 153.30, just below the key 154.00 psychological level. A decisive break above this point could drive further bullish momentum.
On the downside, the 149.00 level, followed by the Asian session low at 148.85, now acts as major support before the 148.65 area, which marks the December 2024 low. Failure to hold these levels could accelerate the USD/JPY pair’s decline toward the 148.00 psychological level. The downward trend may then extend toward the next key support near 147.45 before potentially reaching 147.00.
Expectations of rising inflation and sustained wage growth in Japan have strengthened investor confidence that the BoJ will raise interest rates more aggressively. This limits bearish bets on the JPY. Meanwhile, renewed selling of the US dollar (USD) offsets the USD/JPY pair’s recovery, despite the Fed’s hawkish stance. As a result, confirming a bottom in spot prices requires strong follow-through buying.
From a technical standpoint,
Any upward movement is expected to face strong resistance around the 150.00 psychological level. Continued buying could push the USD/JPY pair toward the 72 EMA on the 4-hour timeframe at 153.30, just below the key 154.00 psychological level. A decisive break above this point could drive further bullish momentum.
On the downside, the 149.00 level, followed by the Asian session low at 148.85, now acts as major support before the 148.65 area, which marks the December 2024 low. Failure to hold these levels could accelerate the USD/JPY pair’s decline toward the 148.00 psychological level. The downward trend may then extend toward the next key support near 147.45 before potentially reaching 147.00.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.