Forex News
- Japanese Yen slides toward 158.00 as the Strait of Hormuz crisis and dovish BoJ board nominations weigh on sentiment.
- The BoJ held rates at 0.75% in January, with Governor Ueda keeping the March and April meetings "live" for a potential hike to 1%, though PM Takaichi's nomination of two dovish academics to the board has complicated the tightening timeline.
- US and Israeli strikes on Iran over the weekend triggered an effective closure of the Strait of Hormuz, sending oil prices sharply higher and boosting the US Dollar as a safe-haven bid, while Japan's heavy reliance on energy imports added further pressure on the Yen.
USD/JPY rose about 0.15% on Tuesday, pushing close to 157.60 as the pair continued to grind higher following last week's sharp rally. Price has been chopping in a wide range between about 152.00 and 159.00 since late January, with alternating large-bodied bullish and bearish candles pointing to a tug-of-war between opposing forces. The latest leg higher has carried the pair back into the upper half of that range after the early-February pullback toward the 153.00 area.
The escalating conflict in the Middle East has added a fresh layer of pressure on the Japanese Yen. The effective shutdown of the Strait of Hormuz, through which roughly 20% of the world's oil passes, has sent energy prices surging and hit Japan particularly hard, given its near-total dependence on imported fuel. Finance Minister Satsuki Katayama said authorities are monitoring the Yen's decline "with a strong sense of urgency" and are in close coordination with the US, keeping the threat of intervention on the table. On the monetary policy front, Bank of Japan (BoJ) board member Hajime Takata renewed his call for rate hikes last week, warning of an "inflation overshoot" risk, while Governor Kazuo Ueda described the March and April meetings as "live" for a potential move. However, PM Takaichi's nomination of two reflationist academics to the BoJ board and reports that she voiced reservations about further tightening during her meeting with Ueda have muddied the near-term outlook.
On the US Dollar side, the Federal Reserve (Fed) held rates at 3.50% to 3.75% in January, with the minutes showing several participants discussed the possibility of raising rates if inflation stays above target. The safe-haven bid into the Dollar following the Iran strikes has reinforced the extended pause, and markets see little prospect of a cut in the near term.
USD/JPY daily chart
Technical Analysis
In the daily chart, USD/JPY trades at 157.55. The near-term bias is bullish as price holds well above the rising 50-day and 200-day exponential moving averages, underscoring a firmly established uptrend despite the recent pullback from highs near 158.50. The rebound from the mid-152.00s has been accompanied by a strong recovery in the Stochastic, which pushes into overbought territory and confirms renewed upside momentum rather than exhaustion at this stage. As long as daily closes remain above the 50-day EMA cluster around 155.50, dips are likely to attract buyers within the broader bullish structure.
Initial resistance emerges at 158.50, the recent swing high that capped the latest advance, followed by the psychological 160.00 area if bulls extend the move. On the downside, immediate support aligns near 156.00, ahead of the 155.50 region where the 50-day EMA converges with prior consolidation, creating a key pivot for trend followers. A break below that zone would expose the next support around 154.00, but holding above it would keep focus on higher highs toward 158.50 and beyond.
(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.
Commerzbank’s Volkmar Baur highlights that China’s ‘Two Sessions’ will set key macro targets and publish a new five-year plan lasting to 2030, with implications for the Yuan. He notes provincial growth targets imply around 5% national growth and estimates true new debt near 9% of GDP, far above the official 4% figure, as authorities juggle fiscal leeway and RMB internationalisation.
Growth, debt and RMB internationalisation
"The ‘Two Sessions’ begin tomorrow in Beijing. This refers to the annual week-long session of the Chinese Parliament and the session of the Chinese People's Political Consultative Conference."
"Every year, the political priorities and macroeconomic targets are announced at these sessions. This year, the new five-year plan, which will remain in force until 2030, will also be published."
"The macroeconomic targets are particularly important for the exchange rate."
"The two most important indicators will be the growth target and new debt. The Chinese provinces have already published their growth targets, and when these are added up, the figure is slightly lower than last year. However, weighted by economic strength, the target is still 5%."
"According to our estimates, China's new debt last year was around 9% of GDP, more than twice the officially reported 4%."
"Given that the internationalisation of the RMB seems to have returned to the forefront of the party leadership's agenda in recent weeks and months, it will be interesting to see whether any targets or formulations have made it into the party's five-year plan."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- NZD/USD drops 0.80% as Middle East tensions boost USD demand.
- Break below 0.5874 (200-day SMA) exposes 0.5836 and 0.5813 supports.
- Bulls must reclaim 0.5909 to target 0.5955 and the 0.6000 milestone.
The New Zealand Dollar extends its losses for the second straight day amid a firm US Dollar courtesy of the Middle East conflict, which fueled fears of higher inflation sparked by the jump in Oil prices. The NZD/USD trades at 0.5889, down 0.80%.
NZD/USD Price Forecast: Technical outlook
Kiwi’s technical picture remains upward biased after briefly testing the 200-day Simple Moving Average (SMA) at around 0.5874, climbing above the latter and finishing the session closer to the 0.5900 figure.
Momentum is bearish biased as depicted by the Relative Strength Index (RSI), which is below its 50-neutral level, aiming towards oversold territory.
Hence, the NZD/USD could extend its losses in the short term if sellers clear the 200-day SMA at 0.5874. Once surpassed, the next area of interest would be the day’s low of 0.5836 ahead of the 100-day SMA at 0.5813. A breach of the latter will expose the January 19 low of 0.5737.
For a bullish resumption, traders must clear key resistance levels like the 50-day SMA at 0.5909. After this, watch the March 3 daily peak at 0.5955 for the next area of supply ahead of 0.6000.
NZD/USD Price Chart – Daily
New Zealand Dollar Price This week
The table below shows the percentage change of New Zealand Dollar (NZD) against listed major currencies this week. New Zealand Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 1.32% | 0.49% | 0.94% | 0.24% | 0.29% | 1.13% | 1.89% | |
| EUR | -1.32% | -0.83% | -0.31% | -1.07% | -1.01% | -0.18% | 0.57% | |
| GBP | -0.49% | 0.83% | 0.34% | -0.26% | -0.19% | 0.64% | 1.43% | |
| JPY | -0.94% | 0.31% | -0.34% | -0.72% | -0.69% | 0.19% | 0.87% | |
| CAD | -0.24% | 1.07% | 0.26% | 0.72% | 0.00% | 0.92% | 1.67% | |
| AUD | -0.29% | 1.01% | 0.19% | 0.69% | -0.01% | 0.82% | 1.60% | |
| NZD | -1.13% | 0.18% | -0.64% | -0.19% | -0.92% | -0.82% | 0.79% | |
| CHF | -1.89% | -0.57% | -1.43% | -0.87% | -1.67% | -1.60% | -0.79% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the New Zealand Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent NZD (base)/USD (quote).
UOB economists Enrico Tanuwidjaja and Vincentius Ming Shen note Indonesia’s February CPI jumped to 4.76% year-on-year, above Bank Indonesia’s target, driven by base effects from electricity tariffs, higher Gold prices and food ahead of Ramadan. They expect inflation to normalize as base effects fade, but highlight food and Brent Oil as upside risks, with 2026 inflation now seen around 2.8–2.9%.
Base effects, food and oil risks
"Indonesia’s headline inflation accelerated to 4.76% y/y in Feb, above Bank Indonesia’s target range and higher than 3.55% y/y in Jan. On a monthly basis, CPI rose 0.68% m/m, relatively contained after deflation (0.15%) in the prior month."
"While this policy effect temporarily lifted headline inflation, its impact is expected to fade soon. Food inflation, however, warrants closer monitoring, at 4.01% y/y in Feb and consistently above 3% since Jul’25."
"Looking ahead, inflation is expected to normalize as the low base effect dissipates. Despite headline CPI exceeding BI’s target range, the drivers are non-structural and unlikely to alter BI’s policy stance on interest rates."
"There is, however, some upside risks to our forecast amid recent military aggression in Iran and the Middle East. Based on our revised Brent crude oil forecast of roughly around 15% average over the next 3 quarters ahead, and assuming it is sustained, we estimated the pass-through impact of around 0.32ppt to the overall inflation."
"As such, our inflation forecast could average higher to around 2.8-2.9% this year, which is still within BI’s target range, though closer to its upper end of the forecast range."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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