Japanese Yen rallies amid strong US data and rising yields

USD/JPY climbs to its highest level in nearly two weeks amid broad US Dollar strength.
US Retail Sales rose 0.5% in April, reinforcing expectations that the Fed may keep interest rates higher for longer.
Trump and Xi described their meeting as “good,” while both sides agreed the Strait of Hormuz must remain open.

Agustin Wazne FXStreet

The USD/JPY pair advances toward the 158.30 region on Friday, reaching its highest level in nearly two weeks as the United States (US) Dollar (USD) strengthens following resilient US economic data and rising Treasury yields.

The latest US Retail Sales report showed consumer spending rose 0.5% in April, reinforcing confidence in the resilience of the US economy despite elevated borrowing costs and persistent inflation pressures. The stronger-than-expected data added to recent gains in the Greenback and supported expectations that the Federal Reserve (Fed) may keep interest rates higher for longer.

On another note, White House economic adviser Stephen Miran resigned from his position on the Fed Board, increasing uncertainty surrounding the future direction of US economic policy. Markets interpreted the development as potentially reducing pressure for a more dovish policy approach, helping Treasury yields move higher.

According to a White House official, the meeting between US President Donald Trump and Chinese leader Xi Jinping was described as “good,” with both leaders discussing ways to enhance economic cooperation and agreeing that the Strait of Hormuz must remain open.

Short-term technical analysis:

On the four-hour chart, USD/JPY trades at 158.34, keeping a bullish near-term tone as it holds above both the 20-period Simple Moving Average (SMA) at 157.72 and the 100-period SMA at 158.00. The pair is hovering just under a tight resistance band between 158.35 and 158.39, while the Relative Strength Index (RSI) near 71 suggests overbought conditions that could slow the advance even as upside momentum remains strong.

On the topside, immediate resistance is seen at 158.35, followed closely by 158.39, a clustered supply zone that needs to be cleared to extend the rally. On the downside, initial support is aligned near the 158.08 horizontal level, ahead of the 100-period SMA at 158.00 and the 20-period SMA at 157.72, with a deeper floor emerging at 157.31 if a corrective pullback unfolds.

(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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