USD/JPY: Safe-haven flows push the pair downwards – OCBC

FXStreet Insights Team FXStreet

USD/JPY fell as demand for safe-haven overwhelms even as Japan is slapped with 24% reciprocal tariff rate. USD/JPY was last at 146.69 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Risks skewed to the downside

"Bullish momentum on daily chart faded while RSI fell. Risks skewed to the downside. Next support at 146.50 levels. Resistance at 149.00/20 levels (21 DMA, 50% fibo)."

"We reiterate our view that beyond the near-term impact of tariffs, we still look for USD/JPY to trend lower, premised on Fed-BoJ policy divergence (Fed rate cut cycle while the BoJ has room to further pursue policy normalisation, supported by economic data including upbeat GDP, signs of potential increase in wages, firmer CPI, etc.)."

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