rose to 153.50 on Wednesday. The yen gave back some of the previous session's gains, despite strong foreign trade statistics.
Japan's exports rose in January at their fastest pace in more than three years, boosted by strong demand for AI-related chips. These data raised expectations of continued policy normalization by the Bank of Japan.
At the same time, weak fourth-quarter GDP, which came in below forecasts and narrowly avoided a technical recession, is limiting optimism.
Investors believe Prime Minister Sanae Takaichi's economic policy could support growth and indirectly strengthen the case for a gradual rate hike. The market is now pricing in the possibility of tighter policy in April.
The IMF has previously stated that it does not set a specific target level for the yen, believing rather that the exchange rate is determined by market factors.
Technical analysis
On the H4 chart, USD/JPY has entered a consolidation phase after a sharp decline from 157.50–158.00. The price currently remains in the range of 152.25 to 153.80. The Bollinger Bands have narrowed noticeably, indicating that volatility is decreasing and the market is forming a base. The area between 153.80 and 153.95 represents the nearest resistance. Support is at 152.25. As long as the price remains below 153.80, the structure remains neutral to bearish.
In the shorter time frame of the first half, there is a short-term local rebound from 152.80–153.00 with an attempt to break out towards the upper limit of the range. The price is approaching 153.90, where strong intraday resistance is forming. A break above 153.95 would open the way towards 154.60. If the resistance fails to be broken, the pair could return to 153.00 and then 152.25.
Overall, the market is compressing on a possible move. A breakout of the range will set the direction for the next move.
Conclusion
In summary, USD/JPY remains caught between conflicting fundamentals: strong export data supports the Bank of Japan's normalization expectations, but weak GDP and political uncertainty limit the yen's strength. Technically, the pair is coiling within a tight range, indicating an imminent directional breakout. The neutral-bearish bias persists as long as the price remains below the resistance 153.80-153.95. A clear break above this level would target 154.60, while a failure could trigger a retest of the 152.25 support. With the BoJ monetary policy meeting in focus, the next significant step awaits a new catalyst.
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.
