The Japanese yen breaks a two -day loss streak against the dollar in the middle of the reactivation of demand for safe shelters

  • The Japanese Yen attracts some buyers at lower levels in the midst of decreasing optimism on the commercial agreement between the US and China.
  • The bets that the BOJ will continue to increase interest rates in 2025 support JPY even more.
  • The moderate expectations of the Fed limit the recovery of the USD from a minimum of several years and weigh on the USD/JPY.

The Japanese Yen (JPY) moves upwards in front of his American counterpart during Thursday’s Asian session and, for now, seems to have stopped his sliding backward from a maximum of several months reached earlier this week. The US Treasury Secretary, Scott Besent, modeled market expectations about a rapid resolution of the commercial confrontation between the US and China, which helped rekindle demand for the JPY, considered safe refuge. Apart from this, the growing acceptance that the Bank of Japan (BOJ) will maintain its position of normalization of politics and increase interest rates even more by 2025 support the JPY.

However, market participants predict a delay in the increases in Boj’s rates, since the tariff measures of US President Donald Trump have obscured economic prospects, which could stop the JPY’s bullish to make aggressive bets. Meanwhile, a relatively moderate perspective of the BOJ still marks a great divergence compared to the expectations that the Federal Reserve (Fed) soon resume its feat cuts. This should continue acting as a tail wind for the JPY of lower performance, which, together with the lack of buying interest in the US dollar (USD), favors the bassists of the USD/JPY.

The Japanese Yen recovers positive traction as the hopes of a rapid commercial agreement between the US and China fader, promoting flows to safe shelters

  • The president of the USA, Donald Trump, said that 145% tariffs on Chinese imports will eventually decrease substantially. Meanwhile, US Treasury Secretary Scott Besent denied a report from the Wall Street Journal that indicated that the White House was considering unilaterally reducing tariffs on Chinese imports.
  • Besent’s comments suggested that the Trump administration could be waiting for China to make the first movement, which cool something the optimism that the commercial war between the two largest economies in the world will break away soon. This, in turn, drives some flows to safe shelters towards the Japanese yen.
  • The Minister of Economic Revitalization of Japan, Ryosei Akazawa, will visit the US for tariff conversations from April 30. Akazawa had said last week that any agreement will probably take time, since it is difficult to say how long it will have to close the gap between the two parties.
  • The governor of the Bank of Japan, Kazuo Ueda, said last week that the Central Bank may need to take policy measures if US tariffs harm the Japanese economy. In addition, reports suggested that the BOJ will cut its economic growth forecasts and warn about the growing risks of the wide Trump commercial tariffs.
  • However, investors seem convinced that the BOJ will continue to increase interest rates in 2025 amid the growing inflation in Japan, which has been above the objective of 2% for approximately three years. This marks a great divergence compared to the moderate expectations of the Federal Reserve.
  • In fact, operators have been valuing the possibility that the Fed resumes its cycle of feat cuts in June and reduces indebtedness costs at least three times by the end of this year. This does not help the US dollar to capitalize a two -day recovery, led by the relief of fears on the independence of the Fed.
  • Trump criticized the president of Ukraine, Volodymyr Zelensky, for his comments that Ukraine would not recognize Russian Crimea control. Trump added that an agreement to end the war was very close, but that Zelensky’s refusal to accept US terms will only prolong the conflict. “
  • This keeps at stake the geopolitical risk premium, which, together with the divergent policy expectations of the BOJ and the Fed, should continue to benefit the JPY of lower performance. The operators now expect the US economic calendar, which includes the initial weekly unemployment applications, durable goods orders and existing housing sales data.

The USD/JPY could attract buyers at lower levels about 142.45-142.40; Mixed technicians require caution for aggressive operators

From a technical perspective, the night closure above the Fibonacci recoil level of 23.6% of the March-April fall and the 143.00 mark was seen as a key trigger for the USD/JPY bulls. In addition, the oscillators in schedules have been gaining positive traction and support the prospects for the appearance of buyers at lower levels near the region of 142.45-142.40. This should help limit the fall near the round figure of 142.00, below which cash prices could slide around half of the 141.00 en route to the region of 141.10-141.00. The downward trajectory could extend even more towards the intermediate support of 140.50 and eventually expose the minimum of several months, levels below the psychological brand of 140.00 reached on Tuesday.

On the contrary, an impulse to return above the 143.00 mark could face an obstacle near the 143.55 area or the maximum of the night oscillation. Some continuation purchases have the potential to raise the USD/JPY torque beyond the round figure of 144.00, towards the confluence of 144.35. The latter includes the level of 38.2% of Fibonacci and the simple mobile average (SMA) of 200 periods in the 4 -hour graph, which if it is exceeded decisively should pave the way for a significant recovery in the short term.

And in Japanese faqs


The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.


One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.


The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.


The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.

Source: Fx Street

You may also like

Justin San turned to Russian users
Top News
David

Justin San turned to Russian users

The founder of the TROM crypto project Justin San turned to Russian participants in the crypto community. Suddenly for his