The USD/JPY downtrend continued as downward momentum accelerated after volatility from US Nonfarm Payrolls data. Key support levels to look out for include 142.50, 142.00, and today’s low of 141.77, with further downside expected if these levels are breached. Resistance stands at 143.44, with higher targets at 144.49 and 145.00 if bulls regain control.
Late on Friday’s North American session, the USD/JPY extended its losses due to the decline in the yield of the US 10-year T-note. The Greenback managed to recover ground against most G8 FX currencies, except safe-haven currencies like the Japanese Yen. At present, the pair is trading at a certain level, indicating a possible shift in market forces.
The Technical outlook for USD/JPY suggests that the downtrend is likely to continue following the latest US Nonfarm Payrolls report-induced volatility. Sellers remain in control, with momentum accelerating to the downside as confirmed by the Relative Strength Index (RSI) pointing lower. Potential support levels include 142.50, 142.00, and 141.77, while resistance is seen at 143.44, with higher targets at 144.49 and 145.00 if the bulls take charge.
The Japanese Yen (JPY) is influenced by various factors such as the performance of the Japanese economy, Bank of Japan’s policy, yield differentials between Japanese and US bonds, and market sentiment. The BoJ’s currency control measures play a significant role in determining the Yen’s value, with interventions aimed at reducing the currency’s strength. The BoJ’s ultra-loose monetary policy, characterized by massive stimulus, has led to a depreciation of the Yen against other major currencies.
The policy divergence between the Bank of Japan and other central banks, particularly the US Federal Reserve, has widened the interest rate differential between the US and Japanese bonds, favoring the US Dollar against the Japanese Yen. The Yen is considered a safe-haven investment, meaning it is perceived as a stable and reliable asset during times of market uncertainty. Consequently, the Yen’s value tends to strengthen against riskier currencies during turbulent periods.
In conclusion, the USD/JPY downtrend continues with downward momentum gaining traction. Key support and resistance levels are crucial to monitor for potential price movements. The Japanese Yen’s value is influenced by various factors, including the BoJ’s currency control measures, yield differentials, and market sentiment. The Yen’s status as a safe-haven investment makes it a valuable asset during market stress, influencing its value against other currencies. Investors should stay informed of these factors to make informed trading decisions in the USD/JPY forex market.
