Forex News
- WTI price drifts lower to near $101.85 in Tuesday’s early Asian session.
- Trump said he called off the Iran attacks.
- Crude oil prices have been volatile after Iran effectively closed the key Strait of Hormuz waterway.
West Texas Intermediate (WTI), the US crude oil benchmark, is trading around $101.85 during the early Asian trading hours on Tuesday. The WTI price declines after US President Donald Trump said he was holding off a military attack on Iran planned for Tuesday at the request of Gulf states.
Bloomberg reported on Monday that Trump said that he’d called off a strike on Iran planned for Tuesday after an appeal by the leaders of Persian Gulf allies, who called for more time to pursue a diplomatic resolution. The US president added that Washington was prepared to attack if an acceptable deal wasn’t reached, but didn’t set a deadline.
Trump is scheduled to hold a meeting on Tuesday with his top national security advisers to discuss the options for military action regarding Iran.
The crucial Strait of Hormuz shipping lane remains effectively closed due to the ongoing conflict between the US and Iran. A lack of progress towards a peace deal that will reopen the critical waterway could boost the WTI price in the near term.
Traders await the release of the American Petroleum Institute (API) report, which will be published later on Tuesday. A larger-than-expected crude oil inventory draw indicates stronger demand and could lift the WTI price, while a bigger build than estimated signals weaker demand or excess supply, which might weigh on the WTI price.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
The Japanese economy expanded 0.5% over the quarter in the first quarter (Q1) of 2026, the preliminary report published by the Cabinet Office showed on Tuesday. This reading followed a 0.3% growth recorded in Q4 of 2025 and beat market expectations of a 0.4% expansion.
On an annualized basis, Japan’s Gross Domestic Product (GDP) grew 2.1%, compared with forecasts of 1.7% and the fourth quarter’s reading of 1.3% growth.
Market reaction
As of writing, the USD/JPY pair is trading just above the 158.83 mark, up nearly 0.05% for the day.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
Reserve Bank of Australia (RBA) Assistant Governor Sarah Hunter said that the central bank is worried higher energy costs will feed through to consumer prices quickly given the stretched state of the domestic economy, potentially creating a significant shift in inflation expectations, Reuters reported on Tuesday.
Key quotes
Expect companies to swiftly transfer increased oil costs.
Some firms plan to raise retail prices, especially in construction.
Our findings indicate pass-through will be quicker and more widespread.
Forecasts assume gulf crisis resolves soon.
Risk of inflation expectations rising is elevated.
Recent increase in oil prices is especially difficult to manage.
Shock emerges amid high capacity limits, domestic cost pressures.
Middle East conflict is a clear outside shock.
Inflation risk seen on both upside and downside.
Market reaction
At the time of writing, the AUD/USD pair is trading 0.27% higher on the day to trade at 0.7168.
RBA FAQs
The Reserve Bank of Australia (RBA) sets interest rates and manages monetary policy for Australia. Decisions are made by a board of governors at 11 meetings a year and ad hoc emergency meetings as required. The RBA’s primary mandate is to maintain price stability, which means an inflation rate of 2-3%, but also “..to contribute to the stability of the currency, full employment, and the economic prosperity and welfare of the Australian people.” Its main tool for achieving this is by raising or lowering interest rates. Relatively high interest rates will strengthen the Australian Dollar (AUD) and vice versa. Other RBA tools include quantitative easing and tightening.
While inflation had always traditionally been thought of as a negative factor for currencies since it lowers the value of money in general, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Moderately higher inflation now tends to lead central banks to put up their interest rates, which in turn has the effect of attracting more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in the case of Australia is the Aussie Dollar.
Macroeconomic data gauges the health of an economy and can have an impact on the value of its currency. Investors prefer to invest their capital in economies that are safe and growing rather than precarious and shrinking. Greater capital inflows increase the aggregate demand and value of the domestic currency. Classic indicators, such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can influence AUD. A strong economy may encourage the Reserve Bank of Australia to put up interest rates, also supporting AUD.
Quantitative Easing (QE) is a tool used in extreme situations when lowering interest rates is not enough to restore the flow of credit in the economy. QE is the process by which the Reserve Bank of Australia (RBA) prints Australian Dollars (AUD) for the purpose of buying assets – usually government or corporate bonds – from financial institutions, thereby providing them with much-needed liquidity. QE usually results in a weaker AUD.
Quantitative tightening (QT) is the reverse of QE. It is undertaken after QE when an economic recovery is underway and inflation starts rising. Whilst in QE the Reserve Bank of Australia (RBA) purchases government and corporate bonds from financial institutions to provide them with liquidity, in QT the RBA stops buying more assets, and stops reinvesting the principal maturing on the bonds it already holds. It would be positive (or bullish) for the Australian Dollar.
US President Donald Trump said that the United States (US) would be “probably satisfied” if it could reach an agreement with Iran that prevents Tehran from obtaining a nuclear weapon, the Guardian reported on Monday.
Trump further stated that he delayed planned strikes on Iran after a “very positive development” in talks and that there was “a very good chance” they could reach a deal.
“I was asked by Saudi Arabia, Qatar, UAE and some others if we could put it off for 2 or 3 days, a short period of time, because they think that they are getting very close to making a deal. And if we can do that where there’s no nuclear weapon going into the hands of Iran, I think and if they’re satisfied, we will be probably satisfied,” said Trump.
Market reaction
At the time of writing, the West Texas Intermediate (WTI) is up 1.08% on the day at 102.02.
WTI Oil FAQs
WTI Oil is a type of Crude Oil sold on international markets. The WTI stands for West Texas Intermediate, one of three major types including Brent and Dubai Crude. WTI is also referred to as “light” and “sweet” because of its relatively low gravity and sulfur content respectively. It is considered a high quality Oil that is easily refined. It is sourced in the United States and distributed via the Cushing hub, which is considered “The Pipeline Crossroads of the World”. It is a benchmark for the Oil market and WTI price is frequently quoted in the media.
Like all assets, supply and demand are the key drivers of WTI Oil price. As such, global growth can be a driver of increased demand and vice versa for weak global growth. Political instability, wars, and sanctions can disrupt supply and impact prices. The decisions of OPEC, a group of major Oil-producing countries, is another key driver of price. The value of the US Dollar influences the price of WTI Crude Oil, since Oil is predominantly traded in US Dollars, thus a weaker US Dollar can make Oil more affordable and vice versa.
The weekly Oil inventory reports published by the American Petroleum Institute (API) and the Energy Information Agency (EIA) impact the price of WTI Oil. Changes in inventories reflect fluctuating supply and demand. If the data shows a drop in inventories it can indicate increased demand, pushing up Oil price. Higher inventories can reflect increased supply, pushing down prices. API’s report is published every Tuesday and EIA’s the day after. Their results are usually similar, falling within 1% of each other 75% of the time. The EIA data is considered more reliable, since it is a government agency.
OPEC (Organization of the Petroleum Exporting Countries) is a group of 12 Oil-producing nations who collectively decide production quotas for member countries at twice-yearly meetings. Their decisions often impact WTI Oil prices. When OPEC decides to lower quotas, it can tighten supply, pushing up Oil prices. When OPEC increases production, it has the opposite effect. OPEC+ refers to an expanded group that includes ten extra non-OPEC members, the most notable of which is Russia.
- Gold price rebounds to near $4,565 in Tuesday’s early Asian session.
- The US Dollar Index drops to its session lows, which supports the USD-denominated commodity price.
- Traders have largely priced out US interest rate cuts this year, while expectations for a hike have risen.
Gold price (XAU/USD) recovers some lost ground from a one-and-a-half-month low to around $4,565 during the early Asian session on Tuesday. The precious metal edges higher amid a weaker US Dollar (USD). However, the potential upside might be limited as the Iran war fueled inflation concerns and expectations of tighter monetary policy.
The USD declines against most major currencies as traders evaluate whether progress in ending the Iran war is likely in the near term. "The U.S. dollar index dropped to its session lows - that's a friendly element for the gold market," said Jim Wyckoff, market analyst at American Gold Exchange.
On the other hand, higher energy prices driven by the Iran war stoked inflation fears and reinforced expectations of US Federal Reserve (Fed) rate hikes. It’s worth noting that Gold is often used amid geopolitical uncertainty but does not yield interest, making it less attractive when interest rates are high.
Traders are pricing in a 35.0% probability that the Fed will raise interest rates by 25 basis points (bps) by year-end, according to the CME FedWatch tool.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- GBP/USD bounced off the 1.33 handle in early Asian trade Monday and recovered to 1.3450 by the New York close, clawing back most of last week's losses.
- Three Bank of England (BoE) speakers split the message on the day, with Breeden landing notably dovish, Greene firmly hawkish, and Mann reinforcing the hawkish camp.
- UK labour data Tuesday and Consumer Price Index (CPI) Wednesday will test the hawkish trade, with Federal Open Market Committee (FOMC) Minutes the same day adding a US-side wildcard.
Cable bottomed at the 1.33 handle in Asian trade and ground higher through London and New York to close back above the 1.34 handle, a session range of roughly 150 pips and a textbook reclaim of the 200-day exponential moving average on the daily chart. The bounce came against the backdrop of a worsening gilt rout, with UK yields climbing as investors digest the political contest now emerging around Prime Minister Keir Starmer's position. That combination, weaker fiscal backdrop and stronger currency, breaks the usual correlation. The Pound is not rallying because Westminster has stabilised. It is rallying because gilt yields are pushing higher and rate-hike pricing is hardening into the BoE's June 18 meeting.
The political backdrop is doing none of the heavy lifting
Manchester mayor Andy Burnham, widely viewed as the most fiscally aggressive of the potential Labour leadership challengers, has been positioning to enter the race after MP Josh Simons stepped aside. Health Secretary Wes Streeting has already resigned to make himself available. Angela Rayner, recently cleared by HMRC in a tax probe, is now a possible contender as well. The bond market is reading the field as a clear fiscal risk and selling gilts accordingly, but the foreign exchange market is for now treating the same rise in yields as a hawkish signal for Bank Rate. Eventually one side of this trade gets repriced. For now, the Pound has the benefit of the doubt because the BoE is being pushed by the same energy-driven inflation pulse that has the Federal Reserve (Fed) leaning hawkish.
Monday's MPC split is the cleaner read
Three BoE speakers in a single day produced exactly the divergence the market expected. Sarah Breeden landed firmly in the dovish camp, hewing to her concerns about UK growth dynamics. Megan Greene came in notably hawkish on inflation persistence. Catherine Mann, the MPC's most reliable hawk, reinforced the call for tighter policy. The Monetary Policy Committee (MPC) split is not new, but Monday's lineup made plain that the next move is genuinely unsettled. Money markets are now pricing the June 18 BoE meeting as a live hike, a remarkable repricing for a Bank that was being talked about as cutting just two months ago.
Tuesday's jobs and Wednesday's CPI are the real tests
Tuesday's labour market batch is the first stress test. Consensus looks for Average Earnings ex-Bonus at 3.4% from 3.6%, Claimant Count Change at 27.3K from 26.8K, and the ILO Unemployment Rate steady at 4.9%. Any cooling, particularly in wages, would knock a leg out from under the hawkish trade just as positioning extends. Wednesday is the bigger event by far. Headline CPI is seen at 3.0% YoY from 3.3%, with core CPI at 2.7% from 3.1%. A clean miss on either side would trim June hike odds materially. A hot print does the opposite and likely forces Cable to test the 1.35 handle.
Levels and bias
The 1.33 handle is the line that has to hold. A clean break below opens 1.32 quickly, where April's lows sit. The 200-day exponential moving average on the daily chart runs through the 1.34 handle and is now reclaimed, with Monday's 1.3450 high as the immediate intraday cap. Above that, the 1.35 handle is the next round-figure barrier and the 1.3650 level caps the May range. Bias for the week is cautiously constructive while the BoE is in play, with Wednesday's CPI as the binary catalyst. The political tail risk is real, and any Labour leadership announcement that puts a fiscally aggressive name into pole position would test the 1.33 handle quickly. Fading rallies into the 1.35 handle makes sense if jobs or CPI come in cool. Buying dips toward the 1.34 handle makes sense if the prints reinforce the hike story.
GBP/USD 15-minute chart
Technical Analysis
In the fifteen-minute chart, GBP/USD trades at 1.3434. The pair holds a constructive intraday bias as price extends well above the day’s opening level at 1.3320, indicating firm buying interest on dips. The Stochastic RSI has rebounded from earlier oversold readings and now sits in positive territory, which reinforces the notion of persistent upside momentum while intraday pullbacks remain shallow.
On the downside, initial support is located at the 1.3320 day-open area, where renewed demand would be expected to emerge if the pair unwinds part of its latest gains. As long as GBP/USD stays above this underlying floor, the short-term structure favors further consolidation of recent advances, with momentum conditions suggesting that any corrective phase is likely to be limited rather than a trend reversal.
In the daily chart, GBP/USD trades at 1.3434. The pair holds above the 200-day exponential moving average (EMA) at 1.3406, which lends underlying support, but it remains capped by the 50-day EMA at 1.3473, keeping the broader tone neutral in the near term. The Stochastic RSI has slipped toward the 30 area, hinting that downside momentum is emerging as buyers hesitate beneath the nearby dynamic resistance.
On the topside, a sustained break above the 50-day EMA at 1.3473 would be needed to reopen scope for a more constructive advance. On the downside, the 200-day EMA at 1.3406 forms initial support; a daily close below this level would expose a deeper pullback as short-term momentum weakens.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling FAQs
The Pound Sterling (GBP) is the oldest currency in the world (886 AD) and the official currency of the United Kingdom. It is the fourth most traded unit for foreign exchange (FX) in the world, accounting for 12% of all transactions, averaging $630 billion a day, according to 2022 data. Its key trading pairs are GBP/USD, also known as ‘Cable’, which accounts for 11% of FX, GBP/JPY, or the ‘Dragon’ as it is known by traders (3%), and EUR/GBP (2%). The Pound Sterling is issued by the Bank of England (BoE).
The single most important factor influencing the value of the Pound Sterling is monetary policy decided by the Bank of England. The BoE bases its decisions on whether it has achieved its primary goal of “price stability” – a steady inflation rate of around 2%. Its primary tool for achieving this is the adjustment of interest rates. When inflation is too high, the BoE will try to rein it in by raising interest rates, making it more expensive for people and businesses to access credit. This is generally positive for GBP, as higher interest rates make the UK a more attractive place for global investors to park their money. When inflation falls too low it is a sign economic growth is slowing. In this scenario, the BoE will consider lowering interest rates to cheapen credit so businesses will borrow more to invest in growth-generating projects.
Data releases gauge the health of the economy and can impact the value of the Pound Sterling. Indicators such as GDP, Manufacturing and Services PMIs, and employment can all influence the direction of the GBP. A strong economy is good for Sterling. Not only does it attract more foreign investment but it may encourage the BoE to put up interest rates, which will directly strengthen GBP. Otherwise, if economic data is weak, the Pound Sterling is likely to fall.
Another significant data release for the Pound Sterling is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought-after exports, its currency will benefit purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.
- USD/JPY held a tight range between 158.50 and 159.00 on Monday, with the Yen logging a sixth consecutive session of losses against the US Dollar.
- Japan's preliminary Q1 Gross Domestic Product (GDP) release tonight at 23:50 GMT opens a heavy data week, with the Federal Open Market Committee (FOMC) Minutes Wednesday and Japan's National Consumer Price Index (CPI) Thursday to follow.
- The Yen has surrendered roughly half of the gains from late April's intervention rounds, putting the 160 threshold that triggered Tokyo's last action back within reach.
The Yen drifted toward the 159.00 zone through Monday's session and closed close to 158.80, marking a sixth straight losing day against a US Dollar that just refuses to peak. The price action itself was unremarkable, a 60-pip range on the day, but the trajectory is striking. The intervention rounds that began on April 30 lifted the Yen by roughly 400 pips at the time. About half of that move has now been given back, and the pair is grinding right back toward the same threshold that prompted Tokyo to step in. The line in the sand is starting to look less like a line and more like a suggestion.
The macro is doing the BoJ's work for it, just in the wrong direction
The Yen's problem is not complicated. The Bank of Japan (BoJ) is still effectively at zero while the Federal Reserve (Fed) is being talked into another potential hike on the back of energy-driven US inflation. The Iran conflict and the Strait of Hormuz disruption have kept Oil prices firm, which both reinforces the US inflation pulse and worsens Japan's energy import bill. Both vectors point the same way for the pair. BoJ board member Kazuyuki Masu has openly argued that policy rates should rise as soon as possible, citing exactly these inflation risks, but the Bank as a whole continues to move at its usual pace. The OECD now projects the BoJ policy rate will reach 2% by the end of 2027, which on a Fed-comparable timeline is glacial.
Tonight's GDP is the first real test
Q1 preliminary GDP at 23:50 GMT is the first red-band event on the docket. Consensus looks for 0.4% QoQ from 0.3% prior, with the annualized rate at 1.7% from 1.3%, and the deflator easing slightly to 3.1% from 3.4%. A hot growth print would leave BoJ doves with less cover to keep dragging their feet and could offer the Yen a short-term lift. A miss hands the carry trade more rope. Either way, this is a data point that matters more for the political narrative around BoJ tightening than for the actual rate differential, which is where the real Yen weakness lives.
FOMC Minutes Wednesday is the bigger lever
The FOMC Minutes on Wednesday at 18:00 GMT are the more consequential print this week, even if the Fed side of the story feels stale. Any softening of the hawkish tone, or any acknowledgement that energy-driven inflation may peak and recede, would take some pressure off the Yen by trimming Fed hike odds. Hawkish Minutes would push USD/JPY straight back toward the 160 line. Thursday's National CPI release closes out the catalyst list, with the headline expected to hold near 1.5% YoY and the core measure around 1.8%, neither of which materially changes the BoJ's pacing calculus.
Levels and bias
Immediate support sits at 158.50 with a deeper floor near 158.00. The 159.00 zone caps the immediate upside, and a clean break opens a path toward 159.50 and the 160 line beyond. Bias for the week is constructive on USD/JPY through risk and rate differentials, with the caveat that intervention risk caps the topside the closer the pair grinds to 160. Fading extensions toward 159.50 and the 160 line with tight risk control reads cleaner than chasing rallies into the danger zone, with tonight's GDP and Wednesday's FOMC Minutes likely to offer better entry points either way. Tokyo officials have repeated that there is no limit on intervention frequency, and US Treasury Secretary Scott Bessent has publicly voiced support for those efforts. Whether either matters depends on how willing the Ministry of Finance is to spend reserves again on a trend the rate differential refuses to break.
USD/JPY 15-minute chart
Technical Analysis
In the fifteen-minute chart, USD/JPY trades at 158.79, hovering near the session lows after retreating from the 159.08 intraday high. The lack of nearby moving average data leaves price location as the primary guide, with the pair consolidating in the lower end of today’s range and tilting slightly bearish in the very short term. However, the Stochastic RSI has dropped to around 18, entering oversold territory and hinting that downside momentum may be losing steam, which could encourage a minor corrective bounce if sellers fail to extend losses decisively below the current area.
With no explicit moving averages or Fibonacci references available, intraday traders will likely treat the recent 159.00–159.08 band as the first notable supply zone to monitor on any rebound, while the day’s open at 158.79 and nearby lows effectively define the immediate demand band. A sustained break below the current floor would open the door to further weakness within the broader range, whereas a recovery back through the 159.00 handle would suggest that buyers are attempting to regain short-term control despite the still-fragile tone implied by the latest price action.
In the daily chart, USD/JPY trades at 158.83, maintaining a constructive bullish bias as it holds comfortably above both the 50-day exponential moving average (EMA) at 158.14 and the 200-day EMA at 155.40. The positioning of price above these rising trend-defining averages suggests that pullbacks are still being treated as corrective within a broader uptrend, even as the Stochastic RSI around the mid-40s hints at fading upside momentum rather than outright overbought conditions.
On the downside, initial support is seen at the 50-day EMA near 158.14, where buyers are likely to defend the short-term trend, followed by stronger structural demand at the 200-day EMA around 155.40 if a deeper correction unfolds. As long as USD/JPY remains above these layers of support, the technical backdrop favors dip-buying strategies, with fresh resistance levels expected to form only on decisive pushes to new cycle highs beyond the current price zone.
(The technical analysis of this story was written with the help of an AI tool.)
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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