Japanese Yen weakens as USD/JPY extends gains toward mid-155.00s
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The Japanese Yen (JPY) continues to slide against the US Dollar (USD), pushing the USD/JPY pair to fresh weekly highs near the mid-155.00s during Wednesday's European session. This movement follows a sharp rebound from over a one-week low on Tuesday, driven by uncertainty surrounding the Bank of Japan's (BoJ) rate hike timeline and a waning safe-haven appeal for the Yen.
Rebounding US Treasury bond yields have further strengthened the USD, adding to the selling pressure on the lower-yielding JPY. Meanwhile, a broadly positive risk tone in global markets continues to undermine demand for the Yen, signaling more upside potential for USD/JPY.
geopolitical risks and policy outlook weigh on JPY
Geopolitical developments remain a significant driver. Russian President Vladimir Putin’s decision to adjust the country’s nuclear doctrine following the US authorization of long-range missile use by Ukraine has tempered safe-haven flows. At the same time, the White House emphasized that the US has no plans to alter its nuclear posture, contributing to a less risk-averse environment.
BoJ Governor Kazuo Ueda reiterated earlier this week that further rate hikes will depend on economic and price trends but stopped short of committing to a hike in December, leaving the JPY vulnerable to speculation.
USD gains traction as Fed signals cautious easing
The USD remains supported by elevated Treasury yields, reflecting market concerns over large fiscal deficits and expectations of modest Fed policy easing under the incoming Trump administration. Federal Reserve Bank of Kansas President Jeffrey Schmid noted on Tuesday that fiscal deficits won’t necessarily drive inflation higher due to the Fed’s intervention, implying the possibility of higher interest rates in the long term.
Market participants now await speeches from influential Federal Open Market Committee (FOMC) members later today for further clues on monetary policy, which could influence USD price dynamics.
Technical outlook: usd/jpy poised for further gains
The USD/JPY pair has regained strong upward momentum, suggesting that the recent pullback from multi-month highs may have run its course. Sustained strength above the 155.00 mark validates a positive bias for the pair.
Immediate resistance lies near 155.35, with further upside potentially targeting 155.70 and the psychological level of 156.00. Beyond this, a rally toward the multi-month high of 156.75 appears likely.
On the downside, initial support emerges around 154.40, followed by stronger levels near 154.00 and 153.30-153.25. A decisive break below these could expose the pair to its 200-day Simple Moving Average (SMA), located near 151.90-151.85.
The USD/JPY pair remains on a firm upward trajectory, buoyed by BoJ uncertainty, geopolitical developments, and Fed expectations. While intervention fears and potential volatility from upcoming FOMC speeches could temper gains, the broader outlook suggests continued strength for the pair in the near term. Traders should monitor key resistance and support levels for further cues.
Rebounding US Treasury bond yields have further strengthened the USD, adding to the selling pressure on the lower-yielding JPY. Meanwhile, a broadly positive risk tone in global markets continues to undermine demand for the Yen, signaling more upside potential for USD/JPY.
geopolitical risks and policy outlook weigh on JPY
Geopolitical developments remain a significant driver. Russian President Vladimir Putin’s decision to adjust the country’s nuclear doctrine following the US authorization of long-range missile use by Ukraine has tempered safe-haven flows. At the same time, the White House emphasized that the US has no plans to alter its nuclear posture, contributing to a less risk-averse environment.
BoJ Governor Kazuo Ueda reiterated earlier this week that further rate hikes will depend on economic and price trends but stopped short of committing to a hike in December, leaving the JPY vulnerable to speculation.
USD gains traction as Fed signals cautious easing
The USD remains supported by elevated Treasury yields, reflecting market concerns over large fiscal deficits and expectations of modest Fed policy easing under the incoming Trump administration. Federal Reserve Bank of Kansas President Jeffrey Schmid noted on Tuesday that fiscal deficits won’t necessarily drive inflation higher due to the Fed’s intervention, implying the possibility of higher interest rates in the long term.
Market participants now await speeches from influential Federal Open Market Committee (FOMC) members later today for further clues on monetary policy, which could influence USD price dynamics.
Technical outlook: usd/jpy poised for further gains
The USD/JPY pair has regained strong upward momentum, suggesting that the recent pullback from multi-month highs may have run its course. Sustained strength above the 155.00 mark validates a positive bias for the pair.
Immediate resistance lies near 155.35, with further upside potentially targeting 155.70 and the psychological level of 156.00. Beyond this, a rally toward the multi-month high of 156.75 appears likely.
On the downside, initial support emerges around 154.40, followed by stronger levels near 154.00 and 153.30-153.25. A decisive break below these could expose the pair to its 200-day Simple Moving Average (SMA), located near 151.90-151.85.
The USD/JPY pair remains on a firm upward trajectory, buoyed by BoJ uncertainty, geopolitical developments, and Fed expectations. While intervention fears and potential volatility from upcoming FOMC speeches could temper gains, the broader outlook suggests continued strength for the pair in the near term. Traders should monitor key resistance and support levels for further cues.