- Amidst continued selling pressure, the USD/JPY currency pair is heading towards the 150.10 support level, the lowest for the currency pair in more than two months.
- Meanwhile, the closest to breaking the psychological support of 150.00, which may strengthen the bears' control over the direction.
- Investors' aversion to risk provided the strong momentum for the bears to move the currency pair to lower levels.
Reasons for the rise of the Japanese Yen
According to Forex market trading, the Japanese yen's gains against the rest of the other major currencies increased, as trade and geopolitical uncertainty boosted demand for the safe-haven currency. Earlier this week, US President Donald Trump announced plans to impose tariffs of 25% on imports of cars, semiconductors, and medicines, raising fears of a broader global trade war. Market concerns were also heightened by geopolitical tensions after Trump described Ukrainian President Volodymyr Zelensky as a dictator amid ongoing talks with Russia to end the war in Ukraine.
Domestically, the rise of the Japanese yen was supported by expectations that the Bank of Japan will raise interest rates further this year. However, there remains uncertainty about whether the central bank will proceed with raising interest rates again in March. Traders are now awaiting inflation data on Friday for more clarity on future interest rate expectations.
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Keep in mind that the USD/JPY pair includes the most important safe havens and any tension in the markets causes a strong movement in the currency pair and is close to new buying levels.
US stocks may be exposed to selling operations
During Thursday's trading and through stock trading companies' platforms... US stock futures declined as investors digested the minutes of the last Federal Reserve meeting and President Donald Trump's renewed threats of tariffs. In January 2025, Federal Reserve officials expressed their preference for further progress on inflation before considering additional US interest rate cuts, while also expressing concerns about the potential impact of Trump's tariffs.
Trump recently unveiled plans to impose 25% tariffs on auto, semiconductor and pharmaceutical imports, set to take effect as early as April 2, raising fresh uncertainty in global trade. With economic data in focus, investors are awaiting today’s weekly US jobless claims report for further clues on the state of the economy. Additionally, earnings reports from major companies such as Walmart, Alibaba and Booking.com are scheduled. Yesterday, the S&P 500 rose 0.24% to a new record high, while the Dow Jones and Nasdaq Composite posted modest gains of 0.16% and 0.07%, respectively.
USD/JPY Technical analysis and Expectations Today:
According to trading through the daily chart, the downward trend of the USD/JPY currency pair is increasing in strength. Technically, by breaking the psychological support of 150.00 reinforces the strength of the bears' control, and with it, technical indicators may begin to move towards strong oversold levels. we still adhere to the trading strategy of buying the dollar against the Japanese yen from every downward level, but without risk, and the closest support levels for the currency pair are currently 149.45 and 148.00, respectively. In contrast, and over the same time period, a break of the downward trend will occur by moving above the 154.70 resistance again.
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