Forex Trading Tools and Services

Currencies USD/JPY

Japanese Yen Suffers Moderate Losses Versus USD but Bulls Expect Hopes for Trade Deal and BoJ Policy Divergence

  • BY
  • April 15, 2025
  • 0 Comments

The Japanese Yen (JPY) is suffering moderate intraday losses versus the US Dollar (USD), with market optimism on US President Donald Trump’s tariff relief and an upbeat risk mood eroding the safe-haven demand for the Yen. Yet, fears of the US-China trade war, coupled with expectations of a US-Japan trade agreement, offer some relief to the JPY. Moreover, the differing monetary stances of the Bank of Japan (BoJ) and the Federal Reserve (Fed) also restrict the downside for the Yen, as investors expect BoJ rate increases with increasing domestic inflation, while the Fed is likely to cut rates because of the economic fallout from tariffs. Technical levels indicate that while the USD/JPY pair can encounter resistance near 144.00, any prolonged weakness below 143.00 might induce bearish momentum towards major support levels. KEY LOOKOUTS •  Expectations of a favorable result from on-going trade talks between the US and Japan can be a tailwind for the Japanese Yen and could counter the general market optimism surrounding risk assets. •  The Bank of Japan’s anticipated rate hikes compared to the Federal Reserve’s possible rate reductions based on the economic impact of tariffs may constrain the downside for JPY and cap the USD/JPY pair. •  The tariff choices made by President Trump, such as possible exemptions in the auto industry and electronics sector, and a threat of increased levies to industries like semiconductors and pharmaceuticals, will persist in shaping sentiment in the market and the future outlook for the USD/JPY. •  Critical technical levels to monitor are resistance around 144.00, with a breakout above that having the potential to spark a rally, while failure below 143.00 would have the potential to trigger additional bearish pressure towards the 142.00 and 141.00 marks. The Japanese Yen (JPY) is experiencing modest losses against the US Dollar (USD) because of a favorable market risk tone and US President Donald Trump’s tariff relief, which reduces the Yen’s safe-haven appeal. Nevertheless, apprehensions regarding the US-China trade war and rising expectations of a US-Japan trade deal are assisting in capping the Yen’s decline. In addition, the mismatch between Bank of Japan (BoJ) and Federal Reserve (Fed) policies, where market expectations are for BoJ rate hikes and possible Fed rate cuts, provides additional support for the JPY. With key events expected in trade negotiations and central bank decisions, technical levels are also emerging as significant, with resistance at 144.00 and support at 142.00 likely to influence the USD/JPY pair’s future directions. The Japanese Yen is seeing moderate losses against the US Dollar, fueled by a risk-positive tone and US reprieves on tariffs, but fears of the US-China trade war and optimism over a US-Japan trade agreement are capping the downside. The difference in monetary policies between the Federal Reserve and the Bank of Japan is further underpinning the Yen. •  The Japanese Yen is experiencing moderate losses against the US Dollar because of more favorable market sentiment and lower demand for safe-haven assets. •  US President Trump’s short-term exemption of consumer electronics and possible auto industry exemptions from tariffs have strengthened market optimism, influencing the strength of the Yen. • Continued worries regarding the intensifying US-China trade war remain a drag on global growth expectations, supporting the JPY to some extent as a safe-haven currency. • Optimism regarding a favorable outcome in US-Japan trade talks is serving as a tailwind for the Yen, countering wider USD strength. • The Bank of Japan will likely increase interest rates, and the Federal Reserve might reduce interest rates as a result of economic effects from tariffs, which will support the Yen against the USD. • The USD/JPY pair has resistance at the 144.00 level, with additional upside limited unless the pair breaks above this level and maintains higher momentum. • The Japanese Yen is supported at 142.00, and additional weakness will take the USD/JPY currency pair towards 141.00, which can be considered as a sign of bearish sentiment if broken. The Japanese Yen (JPY) is weakening against the US Dollar (USD) owing to a positive risk sentiment in the market and a decrease in safe-haven demand. This follows as US President Donald Trump issued temporary exemptions for consumer electronics and suggested potential leniency towards the auto sector in terms of tariffs, which has boosted market sentiment and put pressure on the Yen. Meanwhile, fears of the US-China trade war and expectations that Japan might reach a trade agreement with the US continue to offer some support for the Japanese currency, capping its losses. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView Besides, the differential monetary policy between the Federal Reserve (Fed) and the Bank of Japan (BoJ) is key in determining the prospects for the Yen. While the BoJ is likely to hike interest rates because of surging domestic inflation, the Fed can trim rates because of the economic effect of continued tariffs. This difference in central bank policies indicates that the Yen can gain from the BoJ’s tightening policy while the US Dollar is under pressure from the Fed’s possible easing policies. As the US-Japan trade negotiations progress, the future direction of the Yen will be heavily dependent on the overall economic developments and monetary policy actions of both countries. TECHNICAL ANALYSIS USD/JPY pair is struggling with important resistance around the 144.00 level, where any move higher may face serious obstacles. If the pair is able to break above this, then it has the potential to unleash a short-covering rally and drive prices towards the 144.45-144.50 levels, and possibly beyond to the 145.00 psychological mark. On the flip side, if the pair drops below 143.00, then the support would presumably come from the 142.25-142.20 region, and a breach below this level would pave the way for a subsequent fall towards the 142.00 level. A plunge below this level of support could indicate a bearish trend, and targets would extend to 141.65-141.60 and possibly lower. FORECAST USD/JPY pair may witness bullish movement if it breaches the 144.00 resistance level. A consistent push beyond this point

Read More
Currencies USD/JPY

BoJ Rate Hike Bets and US Tariff Uncertainty Struggle Japanese Yen for Clear Direction

  • BY
  • March 3, 2025
  • 0 Comments

The Japanese Yen (JPY) is underpinned by expectations of additional interest rate hike from the Bank of Japan (BoJ), but fights to achieve clear momentum versus the US Dollar (USD) because of tariff policy uncertainty in the US. While strong Japanese economic data and elevated government bond yields bolster the JPY, concerns over potential trade restrictions under former US President Donald Trump limit its upside. Meanwhile, the USD/JPY pair faces resistance at the 151.00 level, with investors awaiting key US macroeconomic data, including the ISM Manufacturing PMI and Nonfarm Payrolls, for further direction. Technically, the pair is still susceptible to a bear move unless it succeeds in breaking higher than 151.00, which may inspire a short-covering rally. KEY LOOKOUTS • Investors are expecting additional interest rate increases from the Bank of Japan, helping the Yen under steady economic conditions and ongoing inflation pressures. • Market sentiment is dampened by concerns regarding Donald Trump’s planned tariffs on Canada, Mexico, and China, limiting the gains of the Yen despite solid fundamentals. • ISM Manufacturing PMI and Nonfarm Payrolls releases are eyed by traders, which may determine Federal Reserve policy expectations and USD/JPY price action. • USD/JPY fails to overcome the 151.00 resistance; a breakdown will prompt a sell-off towards the 150.00 psychological mark. The Japanese Yen is still in the limelight as market participants balance BoJ rate hike hopes against uncertainties over US tariff policies. While strong economic growth and chronic inflation in Japan favor the Yen, fears of possible trade barriers under Donald Trump’s presidency cap its upside. At the same time, investors keep a close eye on important US economic indicators, such as the ISM Manufacturing PMI and Nonfarm Payrolls, which may affect Federal Reserve policy and move USD/JPY. On the technical side, the pair has solid resistance at 151.00, and if it fails to move above this point, it may lead to a drop to the 150.00 level. The Japanese Yen fights for direction as BoJ rate hike expectations boost it, with US tariff fears limiting gains. Investors look to crucial US economic indicators, with USD/JPY finding significant resistance at 151.00. Failure to rise above this point may see the pair decline towards 150.00. • Ongoing inflation and robust economic figures fuel rumors of additional interest rate increases by the Bank of Japan, which supports the Yen. • Donald Trump’s planned tariffs against Canada, Mexico, and China introduce uncertainty, capping the Yen’s upside despite positive domestic fundamentals. • The pair finds it difficult to break above 151.00, a key technical resistance for continued rally. • Market participants are paying close attention to the ISM Manufacturing PMI and Nonfarm Payrolls readings for insight into Federal Reserve policy intentions. • Market players are also hesitant, not making significant bets until US economic data send better signals about interest rate expectations. • Falling short of breaking above 151.00 levels may take USD/JPY down, and the main levels of support here are 150.00 and 149.75. • Persistent geopolitical and economic uncertainties, such as possible US-Japan trade wars, contribute to market volatility and Yen movement. The Japanese Yen is still in the spotlight as investors expect possible interest rate increases by the Bank of Japan (BoJ). Recent Japanese economic data show steady growth and ongoing inflation, supporting the view that the BoJ will further tighten its monetary policy. Increased interest rates usually make the Yen stronger, as they draw foreign investment into Japanese assets. But global trade tensions, especially with the US, cast a cloud of uncertainty on the market. There are indications that the White House might persuade Japan to make currency movements addressable, with the value of the Yen linked to the BoJ’s actions. This gives another twist to Japan’s economic situation. USD/JPY Daily Price Chart Chart Source: TradingView In the meantime, larger global considerations shape sentiment regarding the Japanese Yen. Investors are watching US economic policy closely, particularly former President Donald Trump’s intentions to impose additional tariffs on Canada, Mexico, and China. These trade barriers may affect global supply chains and economic growth, which would have an indirect effect on Japan’s export-based economy. Further, future US economic data releases such as the ISM Manufacturing PMI and Nonfarm Payrolls will give more insight into the Federal Reserve’s policy direction. Consequently, market players are on guard, waiting for further events to unfold before taking major investment decisions involving the Yen. TECHNICAL ANALYSIS USD/JPY is strongly resisted at the 151.00 level, which had served as the crucial support level. In the event of failure by the pair to breach this level, it would risk triggering a downward movement towards the psychological support point of 150.00. Another fall below 149.80-149.75 could reflect rising bearish momentum, sending the pair to 149.00 and ultimately to the multi-month low around 148.60-148.55. Alternatively, a strong break above 151.00 could induce a short-covering rally, with the next areas of resistance at 151.70-151.75 and the 152.00 level. A breach above 152.40, where the 200-day Simple Moving Average (SMA) currently rests, would mean a possible reversal of the trend and boost bullish sentiment. FORECAST If USD/JPY is able to break above the resistance level of 151.00, then it could initiate a short-covering rally, propelling the pair to the next resistance area of 151.70-151.75. Another prolonged movement beyond this range might bring the 152.00 psychological level into focus. If the bullish momentum persists, the pair may aim for the 152.40 level, where the 200-day Simple Moving Average (SMA) is located. A clear break above this level could indicate a trend change, further enhancing the prospects of additional gains in the near term. On the bearish side, inability to stay above 151.00 may trigger fresh selling pressure, with the initial major support at the 150.00 psychological level. A fall below this level could set the stage for a further slide towards the 149.80-149.75 area. If bearish pressure strengthens, USD/JPY could decline towards 149.00, and a break below this level could spur losses towards the multi-month low near 148.60-148.55. These levels will be key to deciding if the pair

Read More
Currencies USD/JPY

Cautious Yen Rally: BoJ Hike Bets and Falling Back JGB Yields Keep USD/JPY Below 150

  • BY
  • February 24, 2025
  • 0 Comments

The US Dollar has stayed below 150 versus the Japanese Yen, at its lowest against the currency since October, because of increasing expectation that the Bank of Japan will keep raising rates as inflation endures. But backpedaling on JGB yields caps the yen’s gains, as BoJ Governor Kazuo Ueda signals willingness to boost bond purchases if long-term yields increase too steeply. Even with USD-selling momentum, the dollar continues to be under pressure, weighed down by poor US economic data and persistent inflation worries. Japanese Yen bulls are going slow as falling JGB yields and chances of moreforceful BoJ rate hikes keep the currency’s regain in check, keeping the USD/JPY pair under the key 150 level. KEY LOOKOUTS • Track BoJ actions on bond purchases and policy changes since they can shift market sentiment fast and impact USD/JPY levels through major thresholds. • Monitor JGB yield movements keenly, as falling yields may top the yen’s rise, capping potential USD/JPY rebound and impacting overall market dynamics. • Monitor US economic data releases, such as retail and PMI numbers, because worsening indicators may lead to rapid changes in investor sentiment. • Monitor key technical levels on USD/JPY, as breaks of support or resistance areas may facilitate directional moves and quickly shift market positioning. Investors will need to keep a close eye on Bank of Japan policy moves, as surprise bond-buying interventions or rate hikes could quickly change USD/JPY dynamics. Trends in Japanese Government Bond yields need to be closely watched because steadily falling yields could hamper yen advances and cap pair recovery. It is also important to watch U.S. economic data, including retail sales and PMI numbers, closely because deteriorating data can quickly turn market sentiment. Lastly, monitoring important technical levels on the USD/JPY pair is essential since breaks through set support or resistance areas may force sudden directional movements. Bank of Japan policy and Japanese government bond yields since any surprise movements may rapidly change USD/JPY dynamics. Closely monitor U.S. economic indicators and important technical levels for early indications of shifts in market sentiment. • Yen bulls are still guarded even at a two-month peak, as a result of worries about falling Japanese government bond (JGB) yields. • BoJ Governor Kazuo Ueda indicated potential for more bond purchases if yields surge, foreshadowing additional rate hike expectations. • Recent figures reporting Japan’s core inflation at a 19-month peak support projections of more forceful monetary policy tightening. • The USD/JPY pair remains below the pivotal 150 level, with technical resistance anticipated close to this psychological level. • Weaker-than-expected US economic data, such as a disappointing Walmart sales estimate and weakening PMI, have added to renewed USD selling. • Follow-through buying might push the pair upward towards resistance levels, while any weakness in support might set off a more abrupt fall. • There is support on the immediate side around the levels of 148.85-149.00, with downside targets possible at the 147.00 levels if these are broken. Investors in Japanese Yen are being cautious in light of changing market conditions, with expectations of continued policy tightening from the Bank of Japan being muted by efforts to stabilize government bond yields. The central bank has indicated that it is prepared to step in should bond yields climb too steeply, a gesture that highlights its determination to preserve financial stability while coping with the challenges presented by increasing inflation. Recent evidence of a persistent increase in core inflation has further cemented market hopes for more assertive action, even as such policy signals work to contain speculative action in the currency. USD/JPY Daily Price Chart Chart Source: TradingView Concurrently, United States economic indicators such as softer retail sales projections and deceleration in general business activity have added to balanced sentiment in international markets. Investors are still keeping an eye on the overall economic environment, where cautious optimism is slowly giving way to a more cautious approach. With policymakers watching these closely, the changing economic story on both sides of the Pacific is to influence monetary strategies in the future without causing sudden changes in market activity. TECHNICAL ANALYSIS USD/JPY currency pair is currently struggling with major levels that may determine its immediate direction. The close proximity resistance around the 150.00 level acts as a psychological wall, and a prolonged break above this level could set the stage for the pair to aim for higher resistance around the 150.70-150.75 level and higher towards the 150.90-151.00 horizontal support. On the other hand, the region between 148.85 to 148.65 has proven to be a crucial support area, where a breakdown could pave the way for additional losses down to the 147.00-147.45 area. This technical configuration indicates that investors would be keenly watching these levels in order to assess the vigor of potential reversal or continuation moves on the pair’s path. FORECAST If sentiment improves, the USD/JPY pair may witness a gradual upward trajectory. A continued surge through the 150.00 psychological level can create a rally and enable the pair to probe resistance at around the 150.70-150.75 area and then advance towards the 150.90-151.00 zone. Such possible upmove would be underpinned by follow-through purchases and a positive reinterpretation of the policy position of the BoJ, which, if seen as an indicator of faith in Japan’s economic prospects, would fuel fresh investor sentiment. On the negative side, if the immediate support levels around 148.85-148.65 do not hold, the pair can see a sharper fall. A break in this region may trigger a quick change in sentiment, driving the pair lower towards the next support level in the 147.00-147.45 region. In such a case, ongoing vigilance among participants and fresh pressure from USD selling may intensify the fall, placing greater emphasis on these support levels in mitigating the downside risk.

Read More