- USD/JPY confirms bearish trend, carving lower highs and lower lows.
- Next key support levels: 146.00 and September 30 low at 141.64.
- RSI signals bearish momentum, with sellers gaining control.
- A recovery above 148.00 could trigger a corrective bounce before the downtrend resumes.
The USD/JPY stumbles for the second consecutive day as the Japanese Yen (JPY) continues to gather strength due to safe-haven demand. At the time of writing, the pair trades at 147.01 down 0.17% as Tuesday’s Asian session begins.
USD/JPY Price Forecast: Technical outlook
The USD/JPY is set to extend its losses after clearing the October 8 swing low of 147.35, which opened the path to a drop beneath 147.00. Per the price action structure, the pair has carved successive series of lower highs and lower lows, and the separation between the spot price and the 200-day Simple Moving Average (SMA) continues to widen, a sign that sellers are gathering steam.
The Relative Strength Index (RSI) hints that bears would remain in control.
With that said, the next key support would be the 146.00 figure. If surpassed, the next floor for the USD/JPY would be the September 30 pivot low of 141.64. Conversely, if USD/JPY rises past 147.00 and ends on a closing basis above 148.00, this would pave the path for an upward correction before the downtrend resumes.
USD/JPY Price Chart – Daily
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 BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, 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 supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
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.
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