|

Japanese Yen advances as Bessent expects further strengthening

  • USD/JPY retreats to 159.80 on Monday after briefly moving above the psychological 160.00 level.
  • Scott Bessent expects Japanese authorities to take measures that will lead to a stronger Japanese Yen.
  • Investors now turn to US manufacturing activity and labor market data for fresh direction.

USD/JPY declines 0.21% on Monday and trades around 159.80 at the time of writing, after briefly moving above the psychological 160.00 level. The Japanese Yen (JPY) attracts fresh buying as comments from US Treasury Secretary Scott Bessent reinforce expectations that authorities could support the Japanese currency.

Bessent said on Monday that he believes the Japanese government and the Bank of Japan (BoJ) will take measures that will lead to a stronger Japanese Yen. His comments come as the weakness of the Japanese currency remains in focus following the recent surge in USD/JPY toward levels that have previously prompted authorities to intervene in the foreign exchange market.

Concerns over another intervention remain elevated following USD/JPY's move above 160.00. Data from Japan's Ministry of Finance released on Friday showed that Japan spent a record ¥15.4 trillion between July 30 and August 26 to support its currency after the pair reached a multi-decade high near 164.00.

Expectations surrounding Japanese monetary policy also provide some support to the Japanese Yen. Investors anticipate a more restrictive stance from the Bank of Japan, although the country's expansionary fiscal policy, high level of government debt and still relatively low interest rates continue to limit the currency's appreciation potential.

Meanwhile, the US Dollar (USD) trades lower, adding further downside pressure to USD/JPY. Investors now turn to a series of US economic releases that could influence expectations surrounding the interest rate outlook.

The Institute for Supply Management (ISM) is scheduled to release its Manufacturing Purchasing Managers Index (PMI) for August on Tuesday, while the July Job Openings and Labor Turnover Survey (JOLTS) will provide fresh clues about the health of the US labor market. These releases could determine whether the current weakness in the US Dollar persists and, consequently, whether USD/JPY can extend its decline below 160.00.

USD/JPY technical analysis

Chart Analysis USD/JPY

In the one-hour chart, USD/JPY trades at 159.74, holding a mildly bullish near‑term bias as it remains above the 100-hour simple moving average (SMA) at 159.47 and the 200-hour SMA at 159.17, as well as the rising trend-line support around 159.55. The Relative Strength Index (RSI) at 47.82 sits just below the neutral 50 mark, hinting at consolidative rather than impulsive momentum after the recent pullback from the 160.20 horizontal cap.

On the topside, initial resistance is seen at the horizontal barrier near 159.92, ahead of the recent swing high at 160.20, where buying interest has so far stalled. On the downside, immediate support is provided by the trend-line zone around 159.55, followed by the 100-hour SMA at 159.47 and the deeper 200-hour SMA near 159.17, where a break would weaken the current constructive tone and expose a broader corrective phase.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Author

Ghiles Guezout

Ghiles Guezout is a Market Analyst with a strong background in stock market investments, trading, and cryptocurrencies. He combines fundamental and technical analysis skills to identify market opportunities.

More from Ghiles Guezout
Share:

Editor's Picks

AUD/USD trims losses, still near 0.6900

AUD/USD remains well on the defensive, adding to Wednesday’s pullback and trading close to the key 0.6900 contention zone ahead of the opening bell in Asia. Discouraging prints from the Australian labour market report have weighed on the Aussie, which has remained unable to take advantage from the marked pullback in the Greenback.

USD/JPY slides back below 158.00 as USD reverses post-CPI gains

USD/JPY extends the previous day's pullback from a three-week high, attracting follow-through selling and sliding below 158.00 during Thursday's Asian session. Traders remain on high alert amid speculation that authorities will step in to prop up the Japanese Yen. The US Dollar, meanwhile, reverses Wednesday's hot CPI-led gains to April 2025 highs as US bond yields retreat on China bond-buying talk, further pressuring the pair.

Gold: Upside remains capped by $4,200

Gold regains the smile and leaves behind three consecutive days of losses, advancing to the $4,170 region per troy ounce on Thursday. The precious metal’s recovery comes amid the fresh offered stance in the Greenback and declining US Treasury yields while investors remain cautious ahead of the Fed’s Warsh speech on Friday.

Bitcoin rebounds to $82,000 as PPI hits 6.3%, nearly $1B liquidated
Bitcoin (BTC) recovered near $82,000 on Thursday after briefly falling below $80,000, paring losses triggered by hotter-than-expected US inflation data. September PPI inflation rose 6.3% YoY, exceeding forecasts of 5.3% and marking its second-highest level since November 2022. Core PPI inflation climbed to 5% annually, above expectations of 4.4%.
The Iran war will eventually end. Tariffs won't. Here's the problem
Two cost shocks are in the September Consumer Price Index (CPI), and they have different half-lives. Energy is up 20.4% on the year and accounts for about 1.3 points of the 3.7% headline, and that shock reverses when Oil does: Brent was back at its pre-war price on July 1 and above $100 again by the end of the month, after the ceasefire collapsed on July 8.
Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff
Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.