Japanese Yen falls amid strong US Manufacturing PMI

USD/JPY climbs toward the 159.30 region, approaching the key 160.00 level that previously triggered BoJ intervention.
US Manufacturing PMI rises to 55.3 in May, boosting the US Dollar and supporting expectations that the Fed may keep rates higher for longer.
US Treasury Secretary Scott Bessent says excessive FX volatility is undesirable, indirectly supporting Japan’s recent efforts to stabilize the Yen.

Agustin Wazne FXStreet

The USD/JPY pair rose toward the 159.30 price zone, closing in on the 160.00 level, which usually prompts intervention by the Bank of Japan (BoJ).

The latest S&P Global flash Purchasing Managers Index (PMI) data showed the US Composite PMI held steady at 51.7 in May, matching April’s reading and signaling continued economic expansion. Manufacturing activity improved further, with the Manufacturing PMI rising to 55.3 from 54.5, surpassing market expectations of 54.0. Meanwhile, the Services PMI eased slightly to 50.9 from 51.0, highlighting softer momentum in the service sector.

According to S&P Global, “business activity continued to grow in May but at a reduced rate compared to that seen earlier in the year,” while the report also noted that service sector growth remains sluggish amid only modest improvements in new business inflows. The stronger manufacturing figures helped support the Greenback as traders reassessed expectations for Federal Reserve (Fed) rate cuts.

US Treasury Secretary Scott Bessent stated that the United States and Japan agree that excessive volatility in currency markets is undesirable, comments interpreted as indirect support for Tokyo’s recent intervention efforts to stabilize the Yen. Bessent also expressed confidence that Bank of Japan (BoJ) Governor Kazuo Ueda will successfully guide monetary policy and avoid falling behind inflation pressure.

USD/JPY technical analysis:

On the 4-hour chart, USD/JPY trades at 159.19. The pair retains a bullish near-term bias as price holds above both the 20-period Simple Moving Average (SMA) around 158.99 and the 100-period SMA near 157.82, keeping the broader uptrend structure intact. The horizontal line drawn at 159.19 is being tested as a pivot area, while the Relative Strength Index (RSI) eases back toward 68, hinting that upside momentum remains constructive but is edging closer to overbought territory, which could slow the pace of further gains.

On the topside, immediate resistance is seen at the 159.19 pivot area, followed by the horizontal barrier at 159.35, where a clear break would open the way to fresh highs in the near term. On the downside, initial support is located at 159.09, ahead of the 20-period SMA and the horizontal level at 158.90, with the 100-period SMA providing a deeper dynamic floor if a corrective pullback extends.

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

Author

Agustin Wazne

FXStreet

Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.

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