Japanese Yen extends its consolidative price move near multi-decade low against USD

Source Fxstreet
  • The Japanese Yen fails to lure buyers in the wake of the divergent BoJ-Fed policy expectations. 
  • A positive risk tone also undermines the JPY, though intervention fears help limit further losses.
  • Traders also seem reluctant ahead of this week’s key central bank event risk and US macro data.

The Japanese Yen (JPY) continues with its struggle to register any meaningful recovery and languishes near a multi-decade low against its American counterpart during the Asian session on Wednesday. Traders now seem reluctant and opt to wait for the crucial Bank of Japan (BoJ) policy decision on Friday. Apart from this, investors this week will confront the release of the Advance Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index from the US on Thursday and Friday, respectively. The combination of key central bank event risk and important US macro data will play a key role in determining the next leg of a directional move for the USD/JPY pair.

In the meantime, expectations that the gap in interest rates between the US and Japan will stay wide, along with a generally positive risk tone, continue to undermine the safe-haven JPY. However, speculations that Japanese authorities will intervene to prop up the domestic currency hold back the JPY bears from placing aggressive bets. Furthermore, the US Dollar (USD) hangs near its lowest level in over a week touched in the aftermath of disappointing US PMIs on Tuesday and turns out to be another factor that contributes to capping the USD/JPY pair. That said, hawkish Federal Reserve (Fed) expectations should act as a tailwind for the buck and limit the downside for the currency pair. 

Daily Digest Market Movers: Japanese Yen seems vulnerable amid BoJ’s uncertainty rate outlook

  • The Bank of Japan's cautious approach, indicating that accommodative financial conditions will be maintained for an extended period, fails to assist the Japanese Yen in registering any meaningful recovery from a multi-decade low.
  • Hopes that the Iran-Israel conflict will not escalate further ease geopolitical tensions in the Middle East and remain supportive of a generally positive risk tone, which turns out to be another factor undermining the safe-haven JPY. 
  • The JPY bulls shrugged off a survey by the Finance Ministry, showing that about 70% of companies in Japan will raise pay scale in the fiscal year 2024 and that about 40% of firms were struggling with labor shortages even after raising wages. 
  • The recent verbal warnings from Japanese officials that they would intervene in the markets to stem any further weakness in the domestic currency hold back bearish traders from placing fresh bets and help limit deeper losses.
  • Investors keenly await the outcome of the highly-anticipated two-day BoJ policy meeting on Friday for cues on when the central bank will raise interest rates again, which, in turn, will determine the near-term trajectory for the JPY.
  • The US Dollar is pressured by weaker US PMI figures for April released on Tuesday, indicating that the economic upturn lost momentum at the start of the second quarter, and contributes to keeping a lid on the USD/JPY pair. 
  • The S&P Global Composite Purchasing Managers Index (PMI) fell to 50.9 in April's flash estimate, suggesting that the business activity in the US private sector continued to expand, albeit at a softer pace than in the previous month. 
  • Meanwhile, the S&P Global Manufacturing PMI dropped to 49.9 from 51.9 in April, highlighting a contraction in business activity, while the gauge for the services sector declined to 50.9 from March's final reading of 51.7.
  • Investors, however, seem convinced that the Federal Reserve is unlikely to begin its rate-cutting cycle in June and have also scaled back their expectations about the total number of rate cuts in 2024 to less than two.
  • Traders now look to Wednesday's release of the US Durable Goods Orders, though the focus remains on the Advance Q1 GDP and the Personal Consumption Expenditures (PCE) Price Index on Thursday and Friday, respectively.

Technical Analysis: USD/JPY might consolidate further amid overbought RSI on the daily chart

From a technical perspective, the range-bound price action witnessed over the past week or so could be categorized as a bullish consolidation phase against the backdrop of the recent blowout rally from the March swing low. However, the Relative Strength Index (RSI) on the daily chart is flashing overbought conditions and warrants some caution. 

This, in turn, suggests that the USD/JPY pair is more likely to extend its consolidative price move or witness a modest pullback before the next leg up. That said, any meaningful corrective slide is likely to find decent support near the 154.55-154.45 region ahead of the 154.00 mark. The latter should act as a key pivotal point, which if broken could drag spot prices back towards last Friday's low, around the 153.60-153.55 area. 

On the flip side, the multi-decade high, just ahead of the 155 psychological mark, might continue to offer some resistance to the USD/JPY pair. A sustained strength beyond the latter will be seen as a fresh trigger for bullish traders and set the stage for an extension of a nearly two-month-old upward trajectory.

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 current BoJ ultra-loose monetary policy, based on massive stimulus to the economy, has caused the Yen to depreciate against its main currency peers. This process has exacerbated more recently due to an increasing policy divergence between the Bank of Japan and other main central banks, which have opted to increase interest rates sharply to fight decades-high levels of inflation.

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 supports a widening of the differential between the 10-year US and Japanese bonds, which favors the US Dollar against the Japanese Yen.

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.

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
placeholder
Gold Price Forecast: XAU/USD drifts higher above $4,200 as Fed delivers expected cutGold price (XAU/USD) gains momentum to around $4,235 during the early Asian session on Thursday. The precious metal extends its upside after the US Federal Reserve (Fed) delivered an expected third consecutive interest rate cut and maintained its outlook for just one cut in 2026.
Author  FXStreet
Dec 11, Thu
Gold price (XAU/USD) gains momentum to around $4,235 during the early Asian session on Thursday. The precious metal extends its upside after the US Federal Reserve (Fed) delivered an expected third consecutive interest rate cut and maintained its outlook for just one cut in 2026.
placeholder
Ethereum Price Slips Lower — $3,000 Looms as the Key BattlegroundEthereum is attempting to recover from a $3,026 low but remains below $3,200 and the 100-hour SMA, with a bearish trend line near $3,175 capping rebounds as bulls need a clean break above $3,200 to target $3,250–$3,400, while a drop below $3,050 risks a retest of $3,000 and $2,940.
Author  Mitrade
Dec 15, Mon
Ethereum is attempting to recover from a $3,026 low but remains below $3,200 and the 100-hour SMA, with a bearish trend line near $3,175 capping rebounds as bulls need a clean break above $3,200 to target $3,250–$3,400, while a drop below $3,050 risks a retest of $3,000 and $2,940.
placeholder
Bitcoin Slides 5% as Sellers Lean In — Can BTC Reclaim $88,000?Bitcoin has dropped back below $88,000 after rolling over from $90,500, with price still trading under the 100-hour Simple Moving Average. The sell-off found a floor at $85,151, and BTC is now consolidating near that base, but rebounds are facing pressure from a bearish trend line around $89,000. Bulls need to retake $88,000–$89,000 to ease downside risk; failure to do so keeps $85,500–$85,000 and then $83,500 in play, with $80,000 as the deeper “line in the sand.” Bitcoin (BTC) is back in damage-control mode after a sharp pullback wiped out recent gains. The price failed to reclaim the $90,000–$90,500 band, rolled over, and slid through $88,500 before briefly dipping under $87,000. Buyers did show up around $85,000, but the rebound so far looks more like stabilization than a clear trend reversal. Bitcoin dips hard, finds a bid near $85,000(h3) BTC’s latest move lower began when it couldn’t build follow-through above $90,000 and $90,500. Once that upside stalled, sellers took control and pushed price down through $88,500. The slide accelerated enough to spike below $87,000, but the market didn’t free-fall. Bulls defended the $85,000 zone, printing a low at $85,151. Since then, Bitcoin has been consolidating below the 23.6% Fibonacci retracement of the drop from the $93,560 swing high to the $85,151 low — a clue that the bounce is still shallow and that sellers haven’t fully backed off yet. Structurally, BTC is still on the back foot: It’s trading below $88,000, and It remains below the 100-hour Simple Moving Average, keeping short-term trend pressure pointed downward. Resistance is layered, and $89,000 is the problem area(h3) If bulls try to turn this into a recovery, they’ll have to climb through multiple ceilings in quick succession. First, BTC faces resistance around $87,150, followed by a more meaningful barrier near $87,500. From there, the market’s attention snaps back to $88,000 — the level BTC just lost and now needs to reclaim. A close back above $88,000 would improve the tone, but it doesn’t solve the bigger issue: there’s a bearish trend line on the hourly BTC/USD chart (Kraken feed) with resistance near $89,000, which also lines up with the next technical hurdle. If BTC can push through $89,000 and hold, the rebound could extend toward $90,000, with follow-through targets at $91,000 and $91,500. But until price clears that $88,000–$89,000 zone, rallies are at risk of being sold rather than chased. If BTC fails to reclaim resistance, the downside path is clear(h3) The near-term bear case is simple: if Bitcoin can’t climb back above the $87,000 area and keep traction, sellers may attempt another leg lower. Support levels line up like this: Immediate support: $85,500 First major support: $85,000 Next support: $83,500 Then $82,500 in the near term Below that, the major “don’t break this” level is still $80,000. If BTC slips under $80,000, the risk of acceleration to the downside increases significantly — not because it’s magic, but because it’s the kind of psychological and structural level that tends to trigger forced de-risking. Indicators: momentum still leans bearish(h3) The intraday indicators aren’t offering much comfort yet: Hourly MACD is losing pace in the bearish zone. Hourly RSI remains below 50, suggesting sellers still have the upper hand on short timeframes. So while the $85,000 defense held for now, the market hasn’t flipped bullish — it’s just stopped bleeding.
Author  Mitrade
Dec 16, Tue
Bitcoin has dropped back below $88,000 after rolling over from $90,500, with price still trading under the 100-hour Simple Moving Average. The sell-off found a floor at $85,151, and BTC is now consolidating near that base, but rebounds are facing pressure from a bearish trend line around $89,000. Bulls need to retake $88,000–$89,000 to ease downside risk; failure to do so keeps $85,500–$85,000 and then $83,500 in play, with $80,000 as the deeper “line in the sand.” Bitcoin (BTC) is back in damage-control mode after a sharp pullback wiped out recent gains. The price failed to reclaim the $90,000–$90,500 band, rolled over, and slid through $88,500 before briefly dipping under $87,000. Buyers did show up around $85,000, but the rebound so far looks more like stabilization than a clear trend reversal. Bitcoin dips hard, finds a bid near $85,000(h3) BTC’s latest move lower began when it couldn’t build follow-through above $90,000 and $90,500. Once that upside stalled, sellers took control and pushed price down through $88,500. The slide accelerated enough to spike below $87,000, but the market didn’t free-fall. Bulls defended the $85,000 zone, printing a low at $85,151. Since then, Bitcoin has been consolidating below the 23.6% Fibonacci retracement of the drop from the $93,560 swing high to the $85,151 low — a clue that the bounce is still shallow and that sellers haven’t fully backed off yet. Structurally, BTC is still on the back foot: It’s trading below $88,000, and It remains below the 100-hour Simple Moving Average, keeping short-term trend pressure pointed downward. Resistance is layered, and $89,000 is the problem area(h3) If bulls try to turn this into a recovery, they’ll have to climb through multiple ceilings in quick succession. First, BTC faces resistance around $87,150, followed by a more meaningful barrier near $87,500. From there, the market’s attention snaps back to $88,000 — the level BTC just lost and now needs to reclaim. A close back above $88,000 would improve the tone, but it doesn’t solve the bigger issue: there’s a bearish trend line on the hourly BTC/USD chart (Kraken feed) with resistance near $89,000, which also lines up with the next technical hurdle. If BTC can push through $89,000 and hold, the rebound could extend toward $90,000, with follow-through targets at $91,000 and $91,500. But until price clears that $88,000–$89,000 zone, rallies are at risk of being sold rather than chased. If BTC fails to reclaim resistance, the downside path is clear(h3) The near-term bear case is simple: if Bitcoin can’t climb back above the $87,000 area and keep traction, sellers may attempt another leg lower. Support levels line up like this: Immediate support: $85,500 First major support: $85,000 Next support: $83,500 Then $82,500 in the near term Below that, the major “don’t break this” level is still $80,000. If BTC slips under $80,000, the risk of acceleration to the downside increases significantly — not because it’s magic, but because it’s the kind of psychological and structural level that tends to trigger forced de-risking. Indicators: momentum still leans bearish(h3) The intraday indicators aren’t offering much comfort yet: Hourly MACD is losing pace in the bearish zone. Hourly RSI remains below 50, suggesting sellers still have the upper hand on short timeframes. So while the $85,000 defense held for now, the market hasn’t flipped bullish — it’s just stopped bleeding.
placeholder
December Santa Claus Rally: New highs in sight for US and European stocks?Historical data show a rising trend of US and European stocks in December. If the momentum is strong, fund managers may rush in with a buying frenzy.
Author  Mitrade
Yesterday 02: 50
Historical data show a rising trend of US and European stocks in December. If the momentum is strong, fund managers may rush in with a buying frenzy.
placeholder
XRP’s Price Action Flashes a Warning Even as ETF Flows Stay PositiveXRP’s structure remains weak despite 18 straight positive closes in spot XRP ETFs, with analysts warning that $1.98 and other nearby resistance zones could cap rebounds unless the YO region is reclaimed, while deeper downside scenarios keep $1.53 on watch as a potential (not guaranteed) accumulation area.
Author  Mitrade
Yesterday 06: 37
XRP’s structure remains weak despite 18 straight positive closes in spot XRP ETFs, with analysts warning that $1.98 and other nearby resistance zones could cap rebounds unless the YO region is reclaimed, while deeper downside scenarios keep $1.53 on watch as a potential (not guaranteed) accumulation area.
goTop
quote