USD/JPY closing in on 1990 highs

Aaron Hill FP Markets

BoJ more dovish than expected

Friday witnessed a surge in dollar demand versus the beleaguered Japanese yen (JPY). The USD/JPY pairing not only recorded its largest one-day gain this year (+1.7%), but the exchange rate also refreshed multi-decade highs and is swiftly closing in on the ¥160 region, a 1990 peak.

Earlier on Friday, Asia Pac trading witnessed the Bank of Japan (BoJ) leave rates unchanged at 0.0%-0.1%, as widely expected. Yet, what was not anticipated by market analysts was that BoJ Governor Kazuo Ueda, following the rate announcement, communicated that yen weakness has so far had no ‘major’ impact on inflation. The central bank’s chief stated that the plan is to maintain an accommodative policy for now, which was more dovish than expected and, hence, further depreciation in the yen was seen.

The path of least resistance

Keeping things simple, working from the monthly chart, channel resistance, taken from the high of ¥125.85 and resistance at ¥150.80 (now marked as potential support), were engulfed in recent trading. Month to date, the currency pair is up +4.6% (on track to record its largest monthly gain since early 2023) and journeying towards highs from as far back as the 1990s at around ¥160.00. Sheltered just south of the ¥160.00 area is daily resistance coming in from ¥159.88.

While it’s clear the path of least resistance is north towards ¥160.00, should a correction materialise before attempting to find acceptance higher up emerge, support on the daily timeframe calls for attention at ¥156.58. As a result, this could be a location dip buyers show interest in if a retest occurs, with hopes of reaching fresh highs and connecting with ¥160.00.

Author

Aaron Hill

FP Markets

After completing his Bachelor’s degree in English and Creative Writing in the UK, and subsequently spending a handful of years teaching English as a foreign language teacher around Asia, Aaron was introduced to financial trading,

EUR/USD holds firm near 1.1850 amid USD weakness

EUR/USD remains strongly bid around 1.1850 in European trading on Monday. The USD/JPY slide-led broad US Dollar weakness helps the pair build on Friday's recovery ahead of the Eurozone Sentix Investor Confidence data for February.

GBP/USD hovers near 1.3600 as UK government crisis weighs on Pound Sterling

GBP/USD moves sideways after registering modest gains in the previous session, trading around 1.3610 during the European hours on Monday. The pair could come under pressure as the Pound Sterling may weaken amid a fresh government crisis in the United Kingdom.

Gold remains supported by China's buying and USD weakness as traders eye US data

Gold struggles to capitalize on its intraday move up and remains below the $5,100 mark heading into the European session amid mixed cues. Data released over the weekend showed that the People's Bank of China extended its buying spree for a 15th month in January. Moreover, dovish US Fed expectations and concerns about the central bank's independence drag the US Dollar lower for the second straight day, providing an additional boost to the non-yielding yellow metal.

Cardano steadies as whale selling caps recovery

Cardano (ADA) steadies at $0.27 at the time of writing on Monday after slipping more than 5% in the previous week. On-chain data indicate a bearish trend, with certain whales offloading ADA. However, the technical outlook suggests bearish momentum is weakening, raising the possibility of a short-term relief rebound if buying interest picks up.

Japanese PM Takaichi nabs unprecedented victory – US data eyed this week

I do not think I would be exaggerating to say that Japanese Prime Minister Sanae Takaichi’s snap general election gamble paid off over the weekend – and then some. This secured the Liberal Democratic Party (LDP) an unprecedented mandate just three months into her tenure.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.