remains steady at 157.93 on Monday, with the Japanese yen attempting to strengthen amid volatile moves. Demand for defensive assets has increased as geopolitical and trade risks reemerge.
US President Donald Trump has threatened new tariffs against eight European countries in response to tensions over Greenland. These comments have sparked a backlash from European leaders and increased market uncertainty.
Domestic attention is also focused on the upcoming Bank of Japan (BOJ) meeting, where the market expects the central bank to maintain its current policy stance. Investors are looking at June as a possible timetable for the first rate hike. Adding to the uncertainty are rumors of early elections in Japan. Prime Minister Sanae Takaichi could announce elections next month to consolidate his position and promote a more flexible budget policy. As part of his campaign, Takaichi is also considering temporarily suspending the 8% tax on food sales to ease the burden of rising food prices.
Technical analysis:
H4 Chart:
On the H4 chart, USD/JPY is consolidating around the 158.10 level, and the market recently broke down from this range. It focuses on a possible drop to 156.81, with a possible rebound to 158.10 after reaching that level. The MACD indicator supports this bearish outlook as its signal line remains below the zero mark and points downwards.
H1 Chart:
On the H1 chart there is a descending wave forming towards 157.36, with a possible correction to 158.10 before another drop to 156.81. This scenario is confirmed by the stochastic oscillator, which shows the signal line descending towards level 20.
Conclusion:
USD/JPY remains in a consolidation phase, with the market reacting to both domestic and international uncertainties. Investors are closely monitoring the BOJ meeting and possible political developments in Japan. Technically, the pair is showing signs of short-term downtrend, and further declines are possible in the near term.
By RoboForex Analysis Department
Disclaimer: Any forecast contained herein is based on the author's personal opinion. This analysis cannot be considered trading advice. RoboForex assumes no responsibility for trading results based on the trading recommendations and reviews contained herein.
