The Japanese Yen weakened again to around 155 yen per U.S. dollar, erasing gains from last week. This shift occurred as investors reacted to comments by Bank of Japan Governor Kazuo Ueda. He reiterated that the central bank would gradually raise interest rates if the economy develops as expected but did not specify when future hikes might happen. Additionally, Ueda mentioned that they are monitoring various risks related to the U.S. economy.
Last Friday, the Yen strengthened by over 1% after Finance Minister Shunichi Suzuki hinted at possible intervention if the currency depreciates too rapidly. This warning came as the Yen fell to nearly a four-month low, driven by increasing uncertainty about the Bank of Japan’s plans for raising interest rates.
Meanwhile, the U.S. dollar has gained strength due to the Federal Reserve’s expectations of fewer rate cuts and optimism about the U.S. economic performance.
USDJPY Technical Analysis
The Japanese Yen shifted above the 100-period simple moving average and resumed its bullish trajectory. As of this writing, the USD/JPY currency pair trades at approximately 155.1, testing the 61.8% Fibonacci level as support.
As for the technical indicators, the Stochastic Oscillator gives an oversold signal, and combined with the Awesome Oscillator, the recent bar turned red. The development in the technical indicators suggests the market is saturated from buyers and could dip while the primary trend is bullish.
USD/JPY Potential Rise to 161.9 on Breakout
The USD/JPY immediate resistance is at 157.5. From a technical perspective, a new bullish wave could emerge if the currency pair closes and stabilizes above the 157.5 mark. In this scenario, the price could rise toward the 161.9 high.
Please note that the bullish strategy should be invalidated if USD/JPY falls below the 153.3 active support. If this scenario unfolds, a new consolidation phase will likely begin, pushing the price toward the %50 Fibonacci level at 150.7, backed by the 100-period SMA.
- Support: 153.3 / 150.7
- Resistance: 157.1 / 161.9
J.J Edwards is a finance expert with 15+ years in forex, hedge funds, trading systems, and market analysis.
