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- USD/JPY Price Analysis: Dips amid range-bound trade, hovers around 150.00
USD/JPY Price Analysis: Dips amid range-bound trade, hovers around 150.00
- USD/JPY retreats 0.30%, showing signs of consolidation after touching a weekly peak of 150.57.
- Technical analysis indicates potential pressure points with the Tenkan-Sen and February lows providing support.
- Upside momentum requires reclaiming 151.00, setting the stage for a possible advance toward yearly highs.
The USD/JPY lost traction during the mid-North American session, edged down 0.30%, and exchanged hands at 150.08 after reaching a weekly high of 150.57 on Monday.
USD/JPY Price Analysis: Technical outlook
From a daily chart perspective, the USD/JPY is trading sideways capped on the upside by the 151.00 figure, while on the downside is the Tenkan-Sen at 150.02. A breach of the latter will expose the confluence of the February 29 low and the Senkou Span A at 149.21, followed by the 149.00 mark. Further downside is seen at 148.39 at the Kijun Sen level, before testing 148.00.
On the flip side, if buyers regain the 151.00 figure, that could open the door to challenge the November 16 swing high at 151.38, ahead of last year’s high at 151.91. Above this level, look for 152.00.
USD/JPY Price Action – Daily Chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.
The BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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