In today’s comprehensive USDJPY technical analysis, we will first scrutinize the currency pair’s price action. Then, we will meticulously delve into the trading instrument’s fundamental analysis.
USDJPY Technical Analysis – Nears Key Resistance
FxNews—The USDJPY currency pair has recently risen to the upper boundary of the bearish flag pattern. This crucial level is reinforced by the 38.2% Fibonacci resistance and the presence of the Ichimoku cloud. Current technical indicators are signaling bullish tendencies. Notably, the Awesome Oscillator is moving above its signal line. Concurrently, the Relative Strength Index (RSI) maintains a position above the 50 mark, and both indicators suggest upward momentum.
Despite these signals, USDJPY’s overall technical analysis stays bearish as the pair trades below the Ichimoku cloud. Should the bearish trend persist, USDJPY might face a further decline, aiming for the 23.6% Fibonacci resistance level.
Conversely, if the bulls push the price above the Ichimoku cloud, it will likely challenge the current bearish outlook. The price must stabilize above this resistance level for a bullish trend to be confirmed. This event will indicate a significant shift in market sentiment.
JGB Yield Hits Low as BoJ Maintains Policy
Bloomberg—The 10-year Japanese Government Bond (JGB) yield dropped to 0.6%, its lowest point since mid-August. This decline came after the Bank of Japan’s decision to maintain its ultra-easy monetary policy in its final meeting of 2023. The central bank also committed to keeping interest rates low but provided no hints about potential policy changes in the coming year.
Governor Ueda expressed that it is currently difficult to predict with certainty how the central bank will transition away from this ultra-loose policy. The future remains highly uncertain, and the Bank of Japan is still trying to achieve its inflation targets sustainably and stably. Many investors speculate that the Bank of Japan might adjust its policy in 2024 despite these uncertainties. April is currently the most probable time for this potential policy shift.
