The Japanese yen (JPY) attempted a modest rebound from a four-week low against the U.S. dollar (USD) during Friday’s Asian session but failed to gain meaningful traction amid a broadly stronger greenback and improving global risk sentiment.
The initial support for the yen came after Japanese household spending data surpassed expectations, fueling speculation that the Bank of Japan (BoJ) could proceed with additional interest rate hikes. Spending rose 0.4% in March from the previous month and 2.1% year-on-year, outpacing market forecasts. The upbeat figures reinforced the BoJ’s cautious optimism that sustained wage growth may eventually support inflation and consumer activity.
Minutes from the BoJ’s March 18–19 policy meeting, released Thursday, further strengthened the case for future rate hikes, highlighting the central bank’s readiness to tighten policy if inflation trends persist. However, this hawkish tone was counterbalanced by a continued decline in real wages, which fell for a third straight month in March—down 2.1% YoY—due to elevated inflation, which climbed 4.2% annually.
The mixed economic backdrop in Japan has left yen bulls hesitant, particularly as upbeat developments abroad dampen demand for safe-haven assets. Optimism following Thursday’s US-UK trade agreement and anticipation of this weekend’s US-China tariff talks in Switzerland have buoyed risk appetite, acting as a headwind for the JPY.
Meanwhile, the U.S. dollar remains well-supported by the Federal Reserve’s hawkish tone. Fed Chair Jerome Powell signaled earlier in the week that the central bank is not inclined to cut interest rates in the near term, citing ongoing uncertainty around trade policy. The USD has also benefited from easing fears of a recession, supported by strong labor data and improved trade prospects.
With no significant U.S. economic data scheduled for release on Friday, traders are turning their attention to upcoming speeches from several Federal Open Market Committee (FOMC) members. Their comments are expected to provide additional clarity on the Fed’s rate path and could influence short-term demand for the USD.
From a technical standpoint, Thursday’s breakout above the 200-period Simple Moving Average (SMA) on the four-hour chart has shifted near-term momentum in favor of USD/JPY bulls. Technical indicators remain positive on both hourly and daily charts, suggesting that dips may be viewed as buying opportunities.
Immediate support lies near the 145.00 psychological level, aligning with the 200-period SMA. A break below this zone could trigger technical selling toward the next support at 144.45. On the upside, a decisive move above 146.00 and follow-through beyond 146.20 would confirm bullish intent. The pair could then target successive resistance levels at 146.75, 147.00, and ultimately the 148.25–148.30 supply zone.
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