The Japanese Yen continues to face sustained selling pressure amid ongoing trade deal negotiations, with USD/JPY edging closer to the 145.00 level.
FUNDAMENTAL OVERVIEW:
- The Japanese Yen weakened for a second consecutive session amid optimism surrounding a U.S. trade deal.
- Expectations of a potential Bank of Japan rate hike in 2025 and prevailing economic uncertainty may help contain further JPY depreciation.
- Meanwhile, the Federal Reserve’s hawkish pause boosts the U.S. Dollar, driving USD/JPY higher ahead of Trump’s upcoming press conference.
The Japanese Yen (JPY) continues to weaken during the first half of Thursday’s European session, as sustained U.S. Dollar (USD) demand drives the USD/JPY pair beyond the mid-144.00s. Investor sentiment is buoyed by U.S. President Donald Trump’s remarks hinting at a major trade deal announcement later today, fueling optimism ahead of the upcoming U.S.-China trade talks. This improved risk appetite is weighing on traditional safe-haven assets, contributing to the JPY’s underperformance against the USD for a second consecutive day.
Meanwhile, the U.S. Dollar remains supported by the Federal Reserve’s hawkish pause on Wednesday. However, growing economic uncertainty, particularly in light of Trump’s unpredictable trade policy shifts, could discourage aggressive bullish positioning on the greenback. Additionally, the Bank of Japan’s (BoJ) March meeting minutes suggest the central bank is prepared to tighten policy further if economic and inflation projections remain intact. This could help cushion the JPY and limit further upside in USD/JPY, as markets look ahead to Trump’s press conference at 14:00 GMT for fresh direction.
USD/JPY TECHNICAL ANALYSIS CHART:
Technical Overview:
USD/JPY is trading within an up channel.
USD/JPY is moving above all the Moving Averages (SMA).
The Relative Strength Index (RSI) is in the Buying Zone, while the Stochastic oscillator suggests a Positive trend.
Immediate Resistance level: 145.08
Immediate support level: 143.89
HOW TO TRADE USD/JPY
On higher timeframes, USD/JPY experienced a downward retracement before finding support. Subsequently, the price reversed upwards, breaking through a significant resistance level. Following this breakout, USD/JPY pulled back, undergoing a deeper correction to Fibonacci levels, and then resumed its upward trajectory. Currently, a strong bullish candle has formed, but the price is showing rejection from the upside, suggesting a potential pullback and retest before further upward movement.