USD/JPY opens lower on FM pledge to “monitor” market developments

Middle East tensions intensified over the weekend, leading to fresh supply concerns.
US President Trump called for a coalition to protect the Strait of Hormuz.
USD/JPY ticked lower at the weekly opening, holds to familiar levels with a mild bullish twist.

FXStreet Team FXStreet

The war in the Middle East intensified over the weekend, leading to opening gaps across the FX board. In the case of the USD/JPY pair it gapped marginally lower and trades around 159.50, following weekend comments from Japanese Finance Minister Satsuki ‌Katayama, who expressed concerns over the recent sharp depreciation of the Japanese yen, and pledged to closely monitor markets and take action against excessive volatility.

Middle East developments

The world woke up Saturday to news indicating that the United States (US) struck Iranian military installations on Kharg Island, Iran’s main oil export hub. Tehran responded quickly by launching attacks on neighbouring countries, hitting the United Arab Emirates (UAE) and Iraq’s hubs among other targets. Hezbollah claimed to be responsible for targeting the US embassy in Baghdad.

As the weekend unfolded, tensions escalated, leading to massive back-and-forth attacks around the Strait of Hormuz. United States (US) President Donald Trump called allies through Truth Social to help secure the corridor, while early in Asia, the Wall Street Journal reported a coalition is being formed to protect the passage, albeit indicating discussion continues on whether those operations would begin before or after hostilities end.

USD/JPY short-term technical outlook

In the 4-hour chart, USD/JPY trades with a mildly bullish bias as price holds well above the rising 20-, 100- and 200-period Simple Moving Averages (SMAs), with the short-term average clustered around 159.00 and tracking the latest advance. The Momentum indicator remains positive, with the 14-period Momentum indicator above 0 despite easing from recent peaks. The Relative Strength Index (RSI) indicator hovers just below the overbought band near 69.

Immediate support emerges at the 20-period SMA near 159.00, which protects a deeper pullback toward 158.50 and then 158.00, where prior consolidation and the rising 100-period SMA begin to converge. As long as the pair holds above these levels, buyers would remain in control, keeping focus on resistance at the recent high around 160.00, followed by a higher barrier near 160.50. A sustained break below 158.50 would weaken the bullish structure and expose the next downside level at 158.00, but the broader uptrend only faces more material risk while price trades above the 200-period SMA near 155.80.

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

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD consolidates gains just above 0.7000

AUD/USD rebounds sharply and manages to reclaim the area beyond the 0.7000 threshold on Wednesday. Indeed, the pair sets aside two daily drops in a row and regains balance on the back of the marked pullback in the Greenback as investors keep assessing the results from the US Midterms elections.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold pops to four-day highs near $4,050

Gold manages to regain some composure, leaving behind two consecutive daily pullbacks and reclaiming the area above the key $4,000 mark per troy ounce on Wednesday. The strong decline in the US Dollar, shrinking US Treasury yields across the curve and lower crude oil price all contributes to the yellow metal’s recovery.

Bitcoin and Gold Outlook: BTC tops $80K, XAU reclaims $4,000 as Democrats take control of Congress

Bitcoin (BTC) and Gold (XAU/USD) are gaining momentum on Wednesday, as bulls stage a comeback. BTC’s position above $80,000 signals a bullish turnaround, erasing sharp losses from the Binance hack, which impacted $6.3 billion. Meanwhile, Gold’s recovery above $4,000 could strengthen bullish sentiment after the United States (US) midterm elections.

US midterms 2026: Investor Q&A on the Democratic sweep

1. Gridlock replaces the stimulus narrative. A Democratic Congress would constrain Trump's ability to pursue additional fiscal expansion and legislative tax measures. But it cannot simply reverse the president's entire economic agenda. Executive powers, existing legislation and presidential vetoes remain important. 2. AI faces a higher hurdle, not an extinction event.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.