In the Asian trading session, the Japanese Yen (JPY) showed some minor strength. Against the United States Dollar (USD), it inched upward. This exciting movement comes at a time of unprecedented economic uncertainty. The markets are getting more concerned about the possibility of a U.S. government shutdown. The USD/JPY currency pair came under pressure. The market is speculating heavily over when the Bank of Japan (BoJ) will shift course on its ultra-loose policy.
Until these market participants see what the BoJ does, the upside potential of the JPY seems quite limited. The USD/JPY pair isn’t making much of a recovery, there again at the key psychological level of 153.00. This level serves as an emotional floor and ceiling for traders. A near term resistance is apparent in the 153.25 to 153.30 area, creating a challenge for any continuation higher.
US Treasury Secretary Scott Bessent has recently urged Japan’s government to provide the BoJ with the necessary space to mitigate excess exchange rate volatility. This commentary sheds light into the current debates regarding Japan’s monetary policy. It further highlights the burdens that the US will impose on Japan to aggress its monetary policy sooner. These dynamics further complicate an already fraught, complex foreign exchange landscape.
Market apprehension is deep as the clock ticks toward a decisive meeting between US President Donald Trump and Chinese strongman Xi Jinping. This seemingly innocuous meeting could set in motion a series of events that fundamentally reshape global markets for the better. It would further boost the JPY’s profile as a safe haven.
Shortly after these gains, intervention fears on the USD/JPY currency pair continue to go up and down. Speculators are being very cautious, too. A very persuasive move under the 151.55 to 151.50 area might unlock important support ranges at about 151.10 to 151.00. Should USD/JPY pair clear the important resistance zone around 153.25 to 153.30, it may aim for the 154.00 figure. Keep an eye out for this developing story!
The bullish wave of the USD/JPY currency pair could last further if it manages to eclipse the significant resistance levels, possibly lifting it towards mid-154.00s. Sellers need to watch for a break over important resistance at 154.75 to 154.80. This same level is the biggest technical fundamental barrier, in addition to the psychological barrier of 155.00.