The USD/JPY pair retreats from the 145.00 level, facing pressure from declining US Treasury yields and a weakening Dollar. The bearish trend outlook remains strong, with momentum favoring sellers and the Relative Strength Index (RSI) staying negative.
Key support levels to watch for include the August 26 low at 143.44, followed by 143.00, 142.00, and the August 5 low at 141.69. On the upside, a break above 144.00 could target resistance at 146.42 (Tenkan-Sen) and potentially 147.00.
Currently, the pair trades at 143.94, down by 0.40%, as the Greenback extends losses against a basket of six currencies tracked by the US Dollar Index (DXY), dropping to 100.54.
Technical Outlook and Price Action
The USD/JPY continues to trade sideways, with sellers cautious ahead of upcoming US inflation data. From a technical perspective, the pair could re-test the August 5 low of 141.69 if certain hurdles are cleared on the downside.
If the support levels are breached, the pair could target 143.44, followed by 143.00, 142.00, and eventually 141.69. On the other hand, a break above 144.00 could signal a move towards resistance levels at 146.42 and 147.00.
Japanese Yen FAQs
The Japanese Yen (JPY) is influenced by various factors such as the performance of the Japanese economy, Bank of Japan’s policy, bond yield differentials, and risk sentiment among traders. The BoJ’s ultra-loose monetary policy has widened the policy divergence with other central banks, supporting the US Dollar against the Japanese Yen.
During market stress, the Japanese Yen is often considered a safe-haven investment due to its perceived reliability and stability, leading investors to shift their money into JPY. This behavior can strengthen the Yen’s value against riskier currencies in turbulent times.