Japanese Yen pares losses as US Dollar momentum fades despite hawkish Fed stance

• USD/JPY loses momentum after its recent rally, while the Japanese Yen remains fragile.
• Fed Chair Kevin Warsh introduced communication changes, including a shorter policy statement, the removal of forward guidance, and five task forces to review key Fed frameworks.
• The Japanese Yen remains near forty-year lows as intervention talk heats up.

The USD/JPY pair trades near 161.00 on Friday, easing slightly after reaching a two-year high of 161.81 on Thursday, and breaking a five-day winning streak for the US Dollar (USD).The Japanese Yen (JPY) remains fragile as pressure mounts over a possible new intervention by authorities to strengthen the currency.

Meanwhile, the US Dollar is taking a breather after the rally fueled by the Federal Reserve (Fed) policy meeting earlier this week. Chair Kevin Warsh introduced several changes to the Fed’s communication strategy. He said the policy statement would become shorter, simpler, and more focused on facts, while removing forward guidance. The new Fed Chair also announced five task forces to review communications, the balance sheet, data sources, productivity and employment, and the inflation framework.

The BoJ said Governor Kazuo Ueda will return to the office from June 23 after being discharged from the hospital, while continuing outpatient treatment for about two more weeks. Ueda had missed the latest policy meeting due to treatment for an infected liver cyst, leaving Deputy Governor Ryozo Himino to lead the post-meeting communication.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 161.27, retaining a bullish near-term bias as it holds above both the 20-period and 100-period Simple Moving Average (SMA) at 160.77 and 160.14, respectively. The pair is also trading above nearby horizontal support at 161.13, while the Relative Strength Index (RSI) at around 66 suggests firm but not yet extreme upside momentum, hinting that buyers still control the tape as long as these underlying levels remain intact.

On the topside, initial resistance emerges at 161.30, followed by a more notable cap at 161.45, where a break higher would likely open the way for an extension of the uptrend. On the downside, immediate protection is seen at 161.13, ahead of 161.00, with deeper pullbacks likely to encounter dynamic support at the 20-period SMA near 160.77 and then the 100-period SMA around 160.14.

(The technical analysis of this story was written with the help of an AI tool.)