|

USD/JPY bounces off daily low, keeps the red below mid-128.00s amid risk-off mood

  • USD/JPY comes under fresh selling pressure and is weighed down by a combination of factors.
  • The risk-off mood benefits the safe-haven JPY and acts as a headwind amid a softer Greenback.
  • The BoJ’s dovish policy decision on Wednesday warrants caution for aggressive bearish traders.

The USD/JPY pair extends the previous day's sharp retracement slide from the 131.55-131.60 area, or the weekly high and remains under some selling pressure on Thursday. The pair, however, recovers a few pips from the daily low and is currently placed just below mid-128.00s, still down nearly 0.50% for the day.

The prevalent risk-off mood - as depicted by a sea of red across the equity markets - benefits the safe-haven Japanese Yen and exerts some downward pressure on the USD/JPY pair. Investors remain concerned about headwinds stemming from the worst yet COVID-19 outbreak in China. This, along with the protracted Russia-Ukraine war, has been fueling worries about a deeper global economic downturn.

Furthermore, the weaker US economic data released on Wednesday sparks recession fears and weigh on investors' sentiment. Meanwhile, The anti-risk flow, along with bets for smaller Fed rate hikes, drag the yield on the rate-sensitive two-year US government bond to its lowest level since October. This keeps the US Dollar bulls on the defensive and fails to lend support to the USD/JPY pair.

The downside, however, seems limited, at least for the time being, in the wake of the Bank of Japan's (BoJ) dovish policy decision on Wednesday. In fact, the Japanese central bank maintained ultra-low interest rates and left its yield curve control measures unchanged, defying expectations for more hawkish signals. This, in turn, warrants caution for aggressive bearish traders and before positioning for the resumption of the recent downtrend witnessed over the past three months or so.

Market participants now look forward to the US economic docket, featuring the Philly Fed Manufacturing Index, the usual Weekly Initial Jobless Claims and housing market data. This, along with speeches by influential FOMC members and the US bond yields, will drive the USD demand and provide some impetus to the USD/JPY pair. Traders will further take cues from the broader market risk sentiment to grab short-term opportunities around the major.

Technical levels to watch

USD/JPY

Overview
Today last price128.4
Today Daily Change-0.47
Today Daily Change %-0.36
Today daily open128.87
 
Trends
Daily SMA20131.48
Daily SMA50135.24
Daily SMA100140.32
Daily SMA200136.68
 
Levels
Previous Daily High131.58
Previous Daily Low127.57
Previous Weekly High132.87
Previous Weekly Low127.46
Previous Monthly High138.18
Previous Monthly Low130.57
Daily Fibonacci 38.2%130.05
Daily Fibonacci 61.8%129.1
Daily Pivot Point S1127.1
Daily Pivot Point S2125.33
Daily Pivot Point S3123.08
Daily Pivot Point R1131.11
Daily Pivot Point R2133.35
Daily Pivot Point R3135.12

Author

Haresh Menghani

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD keeps the red near 0.6950 after weak Aussie jobs data

AUD/USD holds losses near 0.6950 on disappointing Australian jobs data, extending the previous day's retracement slide from the monthly high and hitting a fresh weekly low during Thursday’s Asian session. Meanwhile, declining US bond yields drag the US Dollar away from the April 2025 high, touched after Wednesday's hot US CPI, helping limit losses for the currency pair.

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 rebounds as global equity sell-off weigh on Treasury yields

Gold attracts fresh buying on Thursday as weakness across global equities, driven by mounting concerns over AI-related investments, triggers a sharp pullback in US Treasury yields and drags the US Dollar lower from fresh year-to-date highs. At the time of writing, XAU/USD trades around $4,155, up 1.21% on the day.

Bitcoin, XRP analyst sentiment jumps as Solana bulls hit 91%: CryptoQuant

Analyst sentiment on Bitcoin, Ethereum, Solana, BNB and XRP has flipped bullish since July, as the top five cryptocurrencies recovered faster and more strongly than during the 2022-2023 market phase, according to CryptoQuant.

Budget preview: Is Healey impressing the bond market?

There is less than 2 weeks to go before the Chancellor delivers his first budget. Unusually for the UK, the economic and financial backdrop to this budget is upbeat. UK bonds have been rallying, the FTSE 100 is the top performing major stock index this week, and the Pound is also stabilising versus the Dollar.

Has Bitcoin really escaped the macro forces it was built to fight?
Over 17 years ago, Satoshi Nakamoto designed Bitcoin (BTC) on the back of a global financial crisis as an alternative to the global monetary system outside the control of central banks, governments and traditional intermediaries. This raises a key question: has Bitcoin really become independent of the macroeconomic forces it was built to challenge?