Market uncertainty and shifting trade headlines have put the Japanese yen back in the spotlight. As investors look for safer places to park their money, the yen is gaining strength—driven by both global tensions and signals from central banks. In this analysis, we break down what’s behind the recent moves in USD/JPY and what could come next for traders.
The Japanese yen appreciated to 143.60 against the US dollar on Thursday, recovering earlier losses as rising geopolitical uncertainty fuelled renewed appetite for safe-haven currencies.
The rebound followed remarks by former President Donald Trump, who announced an upcoming press conference to unveil a trade agreement with a “major” nation—widely believed to be the United Kingdom.
Although the announcement slightly improved overall market risk sentiment, the yen gained strength after Trump reiterated that existing tariffs on Chinese goods would remain during initial trade discussions.
His firm trade stance introduced a sense of caution among investors ahead of this weekend’s US-China talks in Switzerland.
On the domestic front, the Bank of Japan’s meeting minutes revealed a mildly hawkish tilt. Some policymakers indicated willingness to raise interest rates, provided inflation and economic growth projections stay on track.
However, others urged prudence, pointing to potential risks from ongoing shifts in US trade policy.
Meanwhile, renewed focus on US-Japan trade negotiations has emerged, with Japan aiming to finalise a preliminary framework by June.
Such an agreement could influence Japan’s export-reliant economy and impact the Bank of Japan’s policy outlook.
USD/JPY extended its recovery after bouncing from the 142.35 support level, briefly touching 144.00 before entering consolidation.
Short-term bullish momentum remains intact, with the 5- and 10-period EMAs crossing above the 30-period moving average during the Asian session.
However, MACD histogram bars are shrinking, and signal lines are starting to turn downward, indicating fading momentum near the key 144.00 resistance.
As long as price remains above the 30-MA and holds support around 143.45, a bullish breakout attempt remains likely.
On the flip side, a decisive drop below 143.45 could spark a corrective move toward the 143.10–142.85 region.
The yen may continue to benefit from safe-haven flows if global trade tensions and geopolitical risks remain elevated, particularly as markets assess developments in US-China and US-Japan negotiations.
Heightened uncertainty often prompts investors to seek refuge in lower-yielding but stable assets like the Japanese yen, which could drive USD/JPY back toward the 143.00 level.
However, this upward pressure on the yen could be limited if the Bank of Japan signals continued caution or leans dovish in future communications.
Additionally, signs of resilience in US economic indicators—such as strong labour market data or robust consumer spending—may support the dollar and counteract yen appreciation.
A confirmed move above the psychological 144.00 resistance would indicate renewed bullish momentum for USD/JPY, potentially opening the door to further gains toward the 145.20 region.
On the other hand, a sustained break below 143.00 could trigger increased yen buying, setting the stage for a deeper correction toward 142.50 or lower in the near term.
Click here to open account and start trading.
Follow us on:
