The USD/JPY pair is gaining momentum but faces resistance at 146.90, keeping it range-bound. A break above 146.92 could lead to further gains towards 147.00 and the August 15 high of 149.39, with a key target at 150.00. On the downside, a drop below 144.45 may signal a continuation of the downtrend, with support at 141.69.
During Thursday’s North American session, the USD/JPY strengthened following choppy price action on Wednesday, reaching 146.24, up over 0.66% or 95 pips. The push higher in US Treasury bond yields supported the pair’s upward movement.
Technical Outlook and Forecast
Despite momentum favoring sellers, the USD/JPY is aiming higher but has yet to clear the key resistance level at 146.90. The Relative Strength Index (RSI) remains bearish, but buyers are gaining traction as the RSI moves upwards.
To continue the bullish trend, the USD/JPY must surpass the Tenkan-Sen at 146.92. If successful, the next resistance levels are at 147.00 and 149.39, with a potential retest of the 150.00 mark. Conversely, a drop below 144.45 could signal a downtrend continuation towards 141.69.
USD/JPY Price Action – Daily Chart
Japanese Yen FAQs
- Key Factors Influencing Japanese Yen: The value of the Japanese Yen is influenced by various factors, including the performance of the Japanese economy, Bank of Japan policies, bond yield differentials, and risk sentiment among traders.
- Bank of Japan’s Currency Control: The BoJ plays a crucial role in controlling the value of the Yen through interventions in the currency markets. Its ultra-loose monetary policy has led to a depreciation of the Yen against major currencies.
- Policy Divergence and Yen Value: The policy divergence between the BoJ and other central banks, particularly the US Federal Reserve, has widened the differential between US and Japanese bond yields, favoring the US Dollar against the Yen.
- Yen as a Safe-Haven Investment: The Japanese Yen is often considered a safe-haven investment, attracting investors during times of market stress due to its perceived reliability and stability.
Analysis and Conclusion
The USD/JPY pair is currently facing key resistance levels that could determine its future direction. A breakout above 146.92 may lead to further gains towards 150.00, while a drop below 144.45 could signal a continuation of the downtrend. Understanding the factors influencing the Japanese Yen’s value and the implications of central bank policies can help investors make informed decisions in the forex market.