Currently, about 144.40 is quoted as investors weigh divergent monetary policy trajectories between Japan and Bank. While both central banks operate in a climate of high uncertainty, their approaches remain very different, shaping the dynamics of the currency we see today.
In the United States, inflation continues to show resilience. Although the main readings have been moderated a bit, central inflation, especially in services and refuge, remains stubbornly above the objective of 2% of the Fed. This persistence has led to the Federal Reserve to delay the time of its first tariff cut, and the markets now expect that the ease of potential is postponed until the end of 2025. Consequently, the dollar has preserved a strong support, particularly against coins of lower performance as the Yen.
A key development in recent weeks has been the increase in the yields of the 30 -year -old government bonds of Japan, which were shot above the level of 3.00%, reaching their highest brand in more than 20 years, before retiring slightly to around 2.88%. This strong increase is a reflection of multiple factors: the demand for fading of institutional buyers such as insurers of life, the increase in inflation expectations and a broader reevaluation of long -term indebtedness costs.
In addition, the gradual normalization of the Bank of Japan, including control of the performance completion curve and the negative output, has added pressure up to Japanese returns.
It is important to highlight that this increase in performance is promoted by national factors, not by problems such as the United States fiscal deficit, the increase in the United States debt or developments in the United States Treasury bonds. While the global bond markets remain interconnected, the Japan Long Performance Curve is mainly adjusted to national inflation expectations and the possibility of greater incremental adjustment. That said, the yield gap between the US and Japan remains significant, especially at short and intermediate extremes, which continues to support the strength in dollars in relative terms.
In contrast to the United States, Japan still faces a fragile recovery. Stay weak, is subjected and recent figures suggest a contracting impulse. As a result, the BC is expected to proceed with caution with any tighten of additional policy, cushioning the potential of a sustainable yen rebound unless the external forces drive the movement.
Technical General Description: Key levels and market structure
On the Technical Front, USD/JPY is currently around 144.40 within the daily period. The couple recently organized a rebound from the Bollinger Lower band in 141.77, which suggests a potential short -term overall condition. However, the price remains below the main mobile averages and faces immediate resistance in EMA 20, currently positioned in 144.46. Air resistance include EMA 50 in 145.62 and EMA 100 with 147.56, both aligning with the previous ups and downs and acting as formidable technical ceilings.
The MACD histogram remains in negative territory, although it shows a mild bullish convergence, which indicates weakening the bassist impulse instead of a clear reversal of trends. Similarly, the stochastic RSI has risen from oversized levels and is now about 28.43, which suggests an upward potential, although without a confirmed bullish crossover.
On the negative side, the initial support is located in the Bollinger Lower band about 141.77, followed by the low swing in 141.00, and then at the psychological and historical level around 140.30. On the positive side, EMA 20 about 144.45 marks the first resistance, followed by 145.62 (EMA 50), and finally EMA 100 and the previous maximums between 147.55 and 147.89.
Evaluation and market scenarios
The perspective for USD/JPY remains cautiously neutral at short -term bassist. A sustained breakdown would be required above zone 145.60–146.00 to confirm a change at the time and potentially indicate a reversal of tendencies in the medium term. Until it occurs, the couple is still vulnerable to renewed sales pressure, especially if the FOMC minutes tonight indicate a softer Fed position or a greater concern for growth.
From a broader perspective, the combination of sticky inflation in the United States, the increase in yields of global bonds and the gradual output of the ultra good policy box suggests continuous volatility in USD/JPY. However, with the Fed still waiting and Japanese policy formulators are unlikely to harden aggressively, structural forces continue to incline in favor of the US dollar, unless Japanese data significantly surprise up.
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Michel Saliby is a Senior Market Analyst in FXPRO.
