FX.co ★ USD/JPY

The Japanese Yen (JPY) has maintained a strong position against the U.S. Dollar (USD), primarily driven by global economic uncertainty and recent comments from Bank of Japan (BoJ) Governor Kazuo Ueda. Following the BoJ’s latest policy meeting, Governor Ueda’s remarks contributed to the Yen’s gains, while broader market conditions, including a weak tone in global equity markets, have bolstered the safe-haven demand for the Japanese currency. As a result, the USD/JPY pair remains subdued, staying below the key 150.00 level as the market heads into the European trading session. The Yen as a Safe-Haven Currency: The Japanese Yen has long been regarded as a safe-haven currency, particularly during times of geopolitical or economic instability. In recent weeks, rising concerns over the upcoming U.S. presidential election, combined with escalating geopolitical risks, have fueled demand for the Yen. These external factors have provided support to the Japanese currency, despite the ongoing strength of the U.S. economy. The Yen’s ability to hold its ground against the U.S. Dollar during periods of market uncertainty underscores its safe-haven status. Weaker U.S. Dollar Keeps USD/JPY Depressed: The overall lack of substantial buying interest in the U.S. Dollar has played a significant role in preventing the pair from climbing above the critical 150.00 mark. While the U.S. economy remains resilient, the absence of strong bullish momentum for the Dollar has allowed the Yen to maintain its strength. This dynamic highlights the ongoing tug-of-war between the two currencies, with market sentiment leaning toward risk aversion, which has kept the Yen in favor. Technical Analysis of the USD/JPY: The pair faces potential downside pressure. If the current trend continues, the pair could move towards the 149.00 level, with the next key support zone around 148.45. A break below this support could open the door for further declines, with the 148.00 level coming into play. The bearish momentum could extend even further, with the 147.65 confluence resistance level acting as a crucial pivot point. If this level fails to hold, it could mark a more significant shift in the pair’s trajectory.

An analysis of the four-hour chart reveals a potential softening of the bullish bias, as the pair has broken below its ascending channel. This technical shift suggests that the upward momentum may be losing strength, signaling that the bears could take control in the near term. However, it’s important to note that the 14-day Relative Strength Index (RSI) remains above the 50 mark, indicating that bullish momentum is still somewhat active.