- The greenback remains buoyant in the session, weighing on the Japanese yen.
- Upbeat US macroeconomic data boost US Yields.
- The yield curve is inverted in 2s-10s and 5s-30s.
- USD/JPY Price Forecast: The uptrend remains intact and might exacerbate an upward move towards 125.00 if it reclaims 123.00.
The USD/JPY recovers after dipping 350-pips in the week, rallying above the 122.00 mark on a buoyant market mood and a strong US dollar, lifted by solid US macroeconomic data and prospects of the Federal Reserve hiking rates by 50-bps in the May meeting. At the time of writing, the USD/JPY is trading 122.58.
Investors’ mood turned sour post the US macroeconomic data amid the extension of hostilities between Russia and Ukraine in Eastern Europe. The Russian Foreign Minister Lavrov said that Ukraine had understood the situation in Crimea and Donbas. Lavrov added that Russia was preparing a response to Ukraine’s proposals and said there is progress.
The US Dollar Index, a gauge of the greenback’s value vs. a basket of its peers, surges 0.29%, sits at 98.59, while the 10-year US Treasury yield advances five basis points, sits at 2.375%, underpins the USD/JPY.
It is worth noting that the yield curve in 2s-10s and 5s-30s has inverted at press time and is a signal that market players are expecting a slowing economy or even a risk of recession.
USD/JPY Price Forecast: Technical outlook
Friday’s price action witnessed a jump of the USD/JPY, from weekly lows, towards the mid-area of the trading range in the week. Furthermore, a “gravestone-doji” in a downtrend gave traders an early signal that the pair would either consolidate or resume upwards. So once confirmed that the USD/JPY recorded a bottom around 121.27, the uptrend is intact.
Therefore, the USD/JPY first supply zone to challenge would be 123.00. Breach of the latter would expose March 30, daily high at 123.20, once cleared, could pave the way towards 124.30, but first USD/JPY traders would need to reclaim 124.00.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
USD/JPY remains below 158.00 after Japanese data
Soft US Dollar demand helps the Japanese Yen to trim part of its recent losses, with USD/JPY changing hands around 157.70. Higher than anticipated Tokyo inflation passed unnoticed.
AUD/USD weakens to near 0.6200 amid thin trading
The AUD/USD pair remains on the defensive around 0.6215 during the early Asian session on Friday. The incoming Donald Trump administration is expected to boost growth and lift inflation, supporting the US Dollar (USD). The markets are likely to be quiet ahead of next week’s New Year holiday.
Gold depreciates amid light trading, downside seems limited due to safe-haven demand
Gold edges lower amid thin trading following the Christmas holiday, trading near $2,630 during the Asian session on Friday. However, the safe-haven asset could find upward support as markets anticipate signals regarding the United States economy under the incoming Trump administration and the Fed’s interest rate outlook for 2025.
Floki DAO floats liquidity provisioning for a Floki ETP in Europe
Floki DAO — the organization that manages the memecoin Floki — has proposed allocating a portion of its treasury to an asset manager in a bid to launch an exchange-traded product (ETP) in Europe, allowing institutional investors to gain exposure to the memecoin.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.