On Thursday, the Japanese Yen (JPY) staged a partial recovery against the US Dollar (USD), reclaiming ground lost earlier in the week. The JPY attracted buyers amidst an environment of fragile market sentiment, characterized by reduced expectations for an immediate Federal Reserve (Fed) rate cut, geopolitical tensions, and ongoing concerns about China’s economic slowdown. The JPY’s perceived safe-haven status, coupled with a slight USD decline, exerted pressure on the USD/JPY pair.
Despite the JPY’s recovery, a substantial upward movement faces challenges as the Bank of Japan (BoJ) is increasingly expected to maintain its negative interest rate policy. Additionally, upbeat US Retail Sales data released on Wednesday dashed hopes for a March Fed rate cut, potentially supporting the Greenback. The widening US-Japan rate differential could further impede JPY gains, keeping the downside limited for the USD/JPY pair.
Technical Analysis: USD/JPY Bulls Hold Advantage, Key Resistance Levels in Focus
From a technical standpoint, the recent breakout and sustained move above the 147.50 confluence hurdle, encompassing the 100-day Simple Moving Average (SMA) and the 61.8% Fibonacci retracement level, signal a bullish shift. This area now acts as a crucial pivot point, with potential buyers likely to emerge near the 147.00 round figure, providing support and limiting downside risks around the 146.60-146.50 region.
On the upside, the 148.50 level, marking a multi-week peak set on Wednesday, serves as immediate resistance. The daily chart’s oscillators, holding in positive territory and avoiding overbought conditions, suggest the potential for continued buying momentum. A sustained move could propel the USD/JPY pair towards the 149.00 mark, with further upside targeting the 149.70-149.75 region before aiming for the psychological barrier at 150.00.
Japanese Yen Performance for the Week
The accompanying table illustrates the percentage change of the Japanese Yen (JPY) against major currencies throughout the week, highlighting its strength against the Australian Dollar. The data underscores the JPY’s resilience and relative performance amid the current market dynamics.
