The USD/JPY currency pair traded sideways but mildly bearish at approximately 153.8 in today’s trading session. The yen rose after US President-elect Donald Trump announced plans to increase tariffs on countries like China, Mexico, and Canada.
Such news often makes investors worldwide cautious, leading them to buy safer currencies like the yen.
Yen Surges as Scott Bessent Nominated US Treasury Secretary
The yen was also boosted when Trump nominated Scott Bessent as the next US Treasury Secretary. This move helped calm the financial markets. As a result, traders began to reduce their bets on big policy changes expected under Trump’s administration, sometimes called “Trump trades.”
Rising Inflation Fears in Tokyo: What’s Next for Japan
In Japan, investors are focusing on upcoming inflation data from Tokyo. This information is important because it shows how prices might change nationwide.
Additionally, the Governor of the Bank of Japan, Kazuo Ueda, recently hinted that interest rates might go up again, possibly as early as December. He is concerned about the yen’s recent weakness and what it could mean for Japan’s economy.
USDJPY Eyes New Lows Below 155 Resistance
The currency pair shifted below the 100-period simple moving average, trying to stabilize itself to begin a new bearish wave. The immediate resistance rests at the 155.0 mark. From a technical perspective, the downtick in momentum will likely resume as long as USD/JPY hovers below the 155.0 mark.
In this scenario, the next bearish target could be testing the 61.8% Fibonacci support at 153.1, followed by the 78.6% level at 152.44.
- Also read: USDCAD Bullish as TSX Reaches New Highs
The Bullish Scenario
On the other hand, the USD/JPY downtrend should be considered invalid if bulls pull prices above the immediate resistance, the 155.0 mark.
If this scenario unfolds, the uptrend will likely resume, and the pair will likely aim to test the November high at 156.8.
- Support: 153.1 / 152.4 / 151.5
- Resistance: 155.0 / 156.0 / 156.8