USD/JPY Price Forecast: Slips below 149.00 as sellers gather steam
- Failure to hold above 149.00 opens the door for a deeper decline.
- Next key support levels at 148.39 and YTD low of 148.09.
- Upside potential only if buyers reclaim 149.70, with resistance at 150.00 and 151.99-152.32.
The USD/JPY reversed course on Wednesday and dropped some 0.62% late during the North American session, as sellers eyed a daily close below the 149.00 figure. At the time of writing, the pair trades at 148.86.
USD/JPY Price Forecast: Technical outlook
The USD/JPY downtrend remains intact despite buyers' efforts to drive the exchange rate above the Tenkan-Sen at 149.70. Nevertheless failure to do so, exacerbated the drope beneath 149.00 and opened the door for a re-test of the year-to-date (YTD) low of 148.09. A breach of the latter will expose the October 8 daily low of 148.39.
On the other hand, if USD/JPY buyers clear the 149.00 figure, up next lies the Tenkan-Sen at 149.70, Once hurdled, the next resistance is 150.00, and a daily close above the latter could cement the chance to challenge the confluence of the Kijun-Sen and the 200-day Simple Moving Average (SMA) around 151.99-152.32.
USD/JPY Price Chart – Daily
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.