was trading at 159.16 on Friday. It is retreating slightly, but appears less weak than before, amid a two-week truce between the United States and Iran. The drop in oil prices following the announcement of the truce has partially reduced the risks of stagflation and provided some support to the Japanese currency.
Investors' attention is on the upcoming talks in Islamabad, where Vice President JD Vance will lead the US delegation. The meetings with the Iranian side are expected to clarify the prospects for further reduction of tension.
However, sentiment remains subdued. Continued strikes in the region and ongoing disruptions in the Strait of Hormuz continue to put the fragile truce at risk, creating market uncertainty.
The yen has remained under pressure since the conflict began, losing approximately 2%. Investors are factoring in rising energy prices, which are adding to inflationary pressures while hurting Japan's growth prospects.
The market is now awaiting signals from Bank of Japan Governor Kazuo Ueda ahead of the April 28 meeting that could dictate the future direction of monetary policy.
Technical analysis
On the H4 USD/JPY chart, the market is forming a consolidation range around the 158.85 level, which currently extends to 159.30. Today a bullish move towards 159.85 is expected (test from below). Afterwards, a possible decline towards the level of 157.72 will be considered. Technically, this scenario is confirmed by the MACD indicator, whose signal line is below zero and pointing up from low levels.
According to the H1 chart, the market is forming a wave of growth towards the level of 159.82. An extension of the wave to the level 160.00 is possible. Subsequently, a downward wave is expected until at least 158.85. Technically, this scenario is confirmed by the stochastic oscillator, whose signal line is below the 80 level and points strictly downwards.
Conclusion
USD/JPY has stabilized while the yen shows tentative signs of recovery, benefiting from the temporary truce between the United States and Iran and the subsequent decline in oil prices. However, the fragility of the ceasefire – underlined by continued attacks and disruptions in the Strait of Hormuz – means that energy-driven risks remain very much alive. The yen has lost about 2% since the conflict began, and market attention is now focused on upcoming diplomatic talks in Islamabad and signals from Bank of Japan Governor Ueda ahead of the April 28 monetary policy meeting. Technically, a short-term rebound in USD/JPY seems likely, but the broader path will depend on whether the de-escalation continues or tensions reignite.
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.
