The USD/JPY currency pair experienced a notable recovery on Tuesday, building on its modest bounce from the 153.70 area observed overnight. Amidst a backdrop of escalating trade tensions and rebounding US bond yields, the pair gained significant positive traction, reflecting a renewed demand for the US Dollar. Investors are now keenly anticipating the release of key economic indicators from the US as well as the outcome of the Federal Open Market Committee (FOMC) meeting, which could further influence the pair's trajectory.
On Tuesday, the USD/JPY pair demonstrated a strong upward momentum, fueled by an array of factors that bolstered the Greenback. Chief among these were US President Donald Trump's renewed tariff threats, which have revived concerns about inflationary pressures in the United States. This development has led to a rebound in US Treasury bond yields, offering a solid lift to the Dollar from its over-a-month low reached on Monday. The pair's upward movement was evident as it approached the psychological resistance level at 155.00.
Market participants are now setting their sights on the US economic docket for further clues on the currency pair's direction. Scheduled releases include Durable Goods Orders, the Conference Board's Consumer Confidence Index, and the Richmond Manufacturing Index. These reports are expected to provide fresh insights into the health of the US economy and could serve as a catalyst for further price movements in the USD/JPY pair.
Simultaneously, market observers are keeping a close watch on the much-anticipated announcement from the two-day FOMC meeting set for Wednesday. The divergent policy expectations between the Bank of Japan (BoJ) and the Federal Reserve (Fed) may play a crucial role in limiting any substantial gains for the pair. Current market pricing suggests a possibility that the Fed might lower borrowing costs twice by year's end, adding another layer of complexity to the pair's outlook.
Technical analysis indicates that immediate support for the USD/JPY pair lies at the 155.00 mark, followed by a horizontal zone between 154.55 and 154.50, and further down at the 154.00 round figure. Should the pair breach these levels, it might accelerate its decline towards the 153.30 support level, eventually targeting the 153.00 mark if it falls below 153.70.
Conversely, should positive momentum continue, the USD/JPY pair could surpass key resistance points, including the 157.00 round figure and subsequently climb towards an intermediate hurdle at 157.45 en route to the 158.00 mark. This scenario would likely be supported by ongoing risk aversion stemming from Trump's protectionist policies and persistent buying interest in the US Dollar.
In parallel with currency market movements, recent developments surrounding JUP have also garnered attention. Notably, during its Catstanbul event, JUP announced a buyback and a 3 billion token burn, reinforcing its bullish outlook amidst broader market dynamics.