Japanese Yen drifts lower as Greenback retains safe-haven bid

• USD/JPY trades modestly higher, holding above the 159.60 area.
• The US Dollar keeps a mild safe-haven bid as Strait of Hormuz tensions simmer.
• Mixed US housing and production data do little to shift the picture.

USD/JPY holds modest gains near the 159.60s on Tuesday, edging higher on the day. The pair has clawed back ground after a recent sharp pullback and is grinding back toward the upper end of its recent range.

The US Dollar (USD) is keeping a mild bid as tensions around the Strait of Hormuz keep a safe-haven premium in the currency. That flow is favoring the Greenback over the Japanese Yen (JPY), keeping USD/JPY supported even as geopolitical risk runs through the headlines.

US President Donald Trump hardened the tone in a social media post, saying there are no talks or conversations scheduled with Iran and that the US naval blockade remains in full force. He also claimed the Strait of Hormuz is “open and operating” and that all water mines had been removed or detonated, comments that come as Tehran insists the waterway stays shut until Washington meets its conditions.

On the data front, the picture was mixed. US Building Permits for July jumped to 1.443 million, beating expectations, but Housing Starts slipped to 1.239 million, missing forecasts and falling from the prior month. Industrial Production rose 0.2%, just shy of the 0.3% consensus, while Pending Home Sales fell 2.3%, a smaller drop than the previous month but still in contraction.

Short-term technical analysis:

On the 4-hour chart, USD/JPY trades at 159.61, retaining a mild bullish bias as it holds above the 20-period Simple Moving Average (SMA) at 159.38 and a dense support band between 159.55 and 159.59. However, the advance is increasingly capped by the 100-period SMA at 159.69, with additional resistance aligned at 159.73, while the Relative Strength Index (RSI) at 59.46 suggests constructive but not overextended momentum.

On the topside, immediate resistance is seen at the 100-period SMA at 159.69, followed closely by the horizontal barrier at 159.73. On the downside, first support is clustered at 159.59 and 159.55, ahead of the horizontal floor at 159.43 and the 20-period SMA at 159.38, where buyers would be expected to defend the current short-term uptrend.

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