USD/JPY News & Technical Analysis
Japanese Yen retreats toward the 155.00 level against the USD, though further downside appears constrained.
FUNDAMENTAL OVERVIEW:
USD/JPY ticks higher in Tuesday’s European session, extending its rebound from the 154.00 level recorded the previous day. The pair is trading just shy of the key 155.00 psychological mark, up around 0.15% on the day, though further gains appear restrained amid a mixed fundamental landscape.
Concerns over Japan’s fiscal outlook persist, with expectations that Prime Minister Sanae Takaichi may unveil additional stimulus measures to support the economy. At the same time, softer-than-expected Q4 GDP data has dampened speculation of an imminent interest rate hike from the Bank of Japan (BoJ), weighing on the Japanese Yen (JPY) and offering support to the pair.
A modestly firmer US Dollar (USD) is also underpinning USD/JPY. However, the Greenback’s upside may be capped by rising concerns about the economic impact of President Donald Trump’s newly imposed 15% global tariffs. Additionally, expectations of further Federal Reserve rate cuts could limit sustained USD strength.
That said, the Fed’s relatively dovish stance contrasts with growing confidence that the BoJ will continue along its policy normalization path. Reports also indicate that US Treasury Secretary Scott Bessent conducted a “rate check” in January when the Yen weakened sharply toward 158 ahead of Japan’s lower house election, highlighting the risk of coordinated intervention to curb excessive JPY depreciation.
Market participants now await US data releases, including the Conference Board’s Consumer Confidence Index and the Richmond Manufacturing Index, along with remarks from key FOMC officials, for fresh directional cues.
USD/JPY TECHNICAL ANALYSIS H4 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 Buying Zone, while the Stochastic oscillator suggests Positive trend.
Immediate Resistance level: 157.30
Immediate support level: 154.70
HOW TO TRADE USD/JPY
Following a pronounced decline, USD/JPY stabilized at a key support zone where strong buying interest emerged, triggering a notable rebound. The recovery gained further momentum after the formation of a bullish engulfing pattern, which propelled prices higher and confirmed renewed upward pressure.
The pair has since demonstrated sustained strength, decisively breaking above the established resistance zone with a strong bullish impulse. As long as USD/JPY maintains price action above this former resistance—now acting as support—the outlook remains constructive, with potential for continued upside extension in the near term.
TRADE SUGGESTION- LIMIT BUY– 155.27, TAKE PROFIT AT- 157.30, SL AT- 154.20.
