FX.co ★ USD/JPY

The Japanese Yen (JPY) gained strength across the board following remarks from Atsushi Mimura, Japan's Vice Finance Minister for International Affairs, sparking speculation about a potential currency intervention. In addition to Mimura's comments, rising geopolitical tensions in the Middle East and a shift in global risk sentiment have driven haven flows toward the Yen, applying downward pressure on the USD/JPY pair. Despite these factors, the broader market environment signals caution for bearish traders. As of now, the USD/JPY pair trades near the 154.55 region. Fundamentals of the USD/JPY: The US Dollar (USD) remains robust, maintaining its recovery momentum and hovering near a three-week high. This strength is supported by reduced expectations for aggressive policy easing by the Federal Reserve (Fed). The resilience of the US labor market, highlighted by a strong ADP employment report earlier in the week, has further dampened speculation of an oversized Fed rate cut in November. These developments contribute to the supportive outlook for the USD/JPY pair, bolstering prospects for additional gains. The trajectory of the USD/JPY pair will depend on a confluence of economic data releases, geopolitical developments, and policy expectations. Surprise shifts in monetary policy or unexpected economic indicators could lead to heightened volatility. Moreover, any signs of intervention by Japanese authorities or changes in the Fed's policy stance will likely have significant implications for the pair’s direction, demanding close attention from traders. Daily Time Frame Technical Outlook: The pair faces critical resistance at the 155.90 mark. A sustained break above this level could trigger technical buying, propelling the pair toward the 157.00 resistance zone and potentially the 159.00 round figure. Additionally, surpassing the weekly high near the 156.00 region would reinforce a bullish outlook, paving the way for a test of the 158.00 psychological threshold.

Momentum remains broadly positive for USD/JPY, with the pair benefiting from consistent gains since its August lows. The Moving Average Convergence Divergence (MACD) indicator has aligned with price movements throughout November, now firmly in positive territory. These technical signals suggest continued upward momentum, reinforcing the bullish case.