• USD/JPY continued losing ground for the third straight day and dropped to a fresh weekly low.
  • The risk-off mood benefitted the safe-haven JPY and exerted pressure amid sliding bond yields.
  • Hawkish Fed expectations acted as a tailwind for the USD and helped limit any further losses.

The USD/JPY pair maintained its offered tone through the early European session, albeit has managed to recover a few pips from the weekly low. The pair was last seen trading just below the 114.00 mark, still down around 0.20% for the day.

The pair extended this week's rejection slide from the key 115.00 psychological mark and witnessed some follow-through selling for the third successive day on Friday. The downward trajectory dragged the USD/JPY pair back closer to the monthly swing low and was sponsored by a combination of factors.

Concerns that rising borrowing costs could dent the earnings outlook for companies tempered investors' appetite for perceived riskier assets. This was evident from a weaker tone around the equity markets, which forced investors to take refuge in safe-haven currencies, including the Japanese yen.

Bearish traders further took cues from the ongoing retracement slide in the US Treasury bond yields from multi-year highs, which undermined the US dollar. That said, the prospects for a faster policy tightening by the Fed acted as a tailwind for the buck and helped limit losses for the USD/JPY pair.

Investors seem convinced that the Fed would begin raising interest rates in March to combat stubbornly high inflation and have been pricing in the possibility for a total of four hikes in 2022. Hence, the market focus will remain glued to the upcoming FOMC monetary policy meeting on January 25-26.

The outcome will be looked upon for fresh clues and clearer signals about the likely timing when the Fed will commence its rate hike cycle. This, in turn, will play a key role in influencing the near-term USD price dynamics and help determine the next leg of a directional move for the USD/JPY pair.

In the meantime, the US bond yields will drive the USD demand. Apart from this, traders will take cues from the broader market risk sentiment for some short-term opportunities around the USD/JPY pair amid absent relevant market moving economic releases from the US.

Technical levels to watch


Today last price 113.9
Today Daily Change -0.30
Today Daily Change % -0.26
Today daily open 114.2
Daily SMA20 114.97
Daily SMA50 114.33
Daily SMA100 113.2
Daily SMA200 111.45
Previous Daily High 114.55
Previous Daily Low 113.96
Previous Weekly High 115.85
Previous Weekly Low 113.48
Previous Monthly High 115.21
Previous Monthly Low 112.56
Daily Fibonacci 38.2% 114.19
Daily Fibonacci 61.8% 114.32
Daily Pivot Point S1 113.93
Daily Pivot Point S2 113.65
Daily Pivot Point S3 113.34
Daily Pivot Point R1 114.51
Daily Pivot Point R2 114.82
Daily Pivot Point R3 115.1



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content

Recommended content

Editors’ Picks

AUD/USD recaptures 0.6800 as markets stabilize in Asia

AUD/USD recaptures 0.6800 as markets stabilize in Asia

AUD/USD is recovering ground above 0.6800, having plunged to two-year lows on mounting recession fears. The aussie finds some comfort from stabilizing risk sentiment and a broad retreat in the US dollar. Focus shifts to the Fed Minutes. 


USD/JPY slumps towards 135.00 as US dollar corrects

USD/JPY slumps towards 135.00 as US dollar corrects

USD/JPY is tumbling towards 135.00, despite a brief pullback in the US dollar. The bears are lurking in a risk-off setting and lower US yields are supporting a bid in the yen. The yield on the US 10-year Treasury fell 6bps to 2.82% into early Asia. Fed Minutes awaited. 


Gold rebound pokes $1,770, focus on recession, Fed Minutes

Gold rebound pokes $1,770, focus on recession, Fed Minutes

Gold Price consolidates the biggest daily fall in three weeks around $1,770, refreshing intraday high to $1,772 during Wednesday’s Asian session. The precious metal remains below the key support-turned-resistance after confirming the bearish inverted cup-and-handle formation the previous day.

Gold News

EUR/USD: Bears brace for fresh multi-year low around 1.0250

EUR/USD: Bears brace for fresh multi-year low around 1.0250

EUR/USD remains pressured around the lowest levels since December 2002, flashed the previous day. The pair is consolidating the downside amid a minor pullback in the US dollar amid persisting risk-off tone and a looming gas crisis in Europe. 


FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!