Japanese Yen: Under pressure as USD eyes 160.50 – Societe Generale

Societe Generale analysts note USD/JPY has rebounded after testing a multi‑month channel floor near 155.50/155, now aligned with the 200‑DMA. The pair is edging toward the April peak at 160.50/160.70, seen as interim resistance. Spot remains above the 50‑day moving average, with support at 157.50 and resistance at 160.50, as markets eye a possible BoJ hike in June.

Rebound faces major technical hurdle

"USD/JPY has rebounded after testing the lower boundary of a multi-month channel near 155.50/155 (which now also coincides with the 200-DMA). The pair is gradually advancing toward the April peak at 160.50/160.70, which may act as an interim resistance. It will be important to observe whether USD/JPY can break above this hurdle."

"Spot rangebound and perched above 50dma (158.75). Option expiries at 158.35-97 ($7.2bn), 159.00-00 ($1.8bn). Support 157.50, resistance 160.50."

"A failure to move beyond 160.50/160.70 could result in resumption of the down move.10y UST/Bund Spread has embarked on a widening move after crossing the descending trend line in place since 2024."

"Japan headline CPI slows to 1.4% yoy in April. Core (ex-fresh food and energy) down to four-year low of 1.9% yoy from 2.4%. Base effects driven CPI miss may not stop the BoJ from hiking 25bp in June."

"Japan’s PMI showed greater resilience compared to Europe notwithstanding the similar challenge of energy price, but the weaker Yen and accommodative interest rates may be shielding the economy from a bigger shock."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)