The Japanese Yen is rebounding sharply as the USD/JPY currency pair struggles to hold on to its relief rally. It has now recently plumbed a one-week low in the mid-151.00s. Anxiety in the market, in part spurred by fears ahead of the expected Trump-Xi sit-down has jumped. Consequently, demand for safe-haven currencies, such as the Yen, has skyrocketed.
On Thursday morning, the USD/JPY bounced in the Asian trading session, but further upside looks limited. Traders are highly focused on the next policy update from the Bank of Japan (BoJ). This amendment is expected to make a big impact in shifting market forces. The euphoria with this upcoming meeting is adding to a jittery market’s nervousness, at best.
Pessimist speculators are cashing in after late September’s drop in the USD/JPY. They are profiting big time on the pair’s fight to keep its upward trajectory. Indicating these bullish oscillators, a dip-buyers trend seems to be emerging. In the daily chart oscillators, supports point to the psychologically important level of 152.00. If the currency pair convincingly breaks below this level, it could expose further declines towards the overnight swing low around the 151.55-151.50 range.
The outlook for the USD/JPY is mixed. Low economic anxieties from a potential near-term U.S. government collapse are weighing heavily against the dollar. This picturesque scene plays a part in boosting the Yen, as it becomes a safe haven for investors looking for stability during times of turbulence.
As of now, the 151.10-151.00 area has become a key support region for the USD/JPY pair. If the selling pressure continues, this level will likely be tested, opening the door to a much more significant decline. On the flip side, if the cross tries to recover bullish strength, it will face firm resistance around the 153.00 psychological level. Traders will be keenly observing the 153.25-153.30 area. They view it as the next major resistance area before heading towards the 154.00 level.
If USD/JPY continues to strengthen from here, market analysts expect it will get enough momentum to go into the mid-154.00s. In addition, they suggest that the 154.75-154.80 zone can act as an important target for aggressive buyers. The psychological level of 155.00 still stands out, being the most important hurdle for the pair, being a strong barrier.