USD/JPY Price Analysis: Tests resistance at 149.50 near nine-day EMA
- USD/JPY could aim for initial support at the five-month low of 148.10.
- The pair continues to decline within a descending channel, reinforcing a confirmed bearish bias.
- The nine-day EMA at 149.75 serves as an immediate resistance level.
USD/JPY gains ground after registering losses in the previous two successive days, trading around 149.40 during the European session on Wednesday. An analysis of the daily chart showed the USD/JPY pair moves downward within a descending channel, indicating a confirmed bearish bias.
The USD/JPY pair remains below the nine-day Exponential Moving Average (EMA), indicating a weaker short-term price momentum. Additionally, the 14-day Relative Strength Index (RSI), a momentum indicator, is positioned above the 30 level, reinforcing the persistent bearish bias.
In terms of support, the USD/JPY pair could target the five-month low at 148.10, recorded on March 4, followed by the psychological level of 148.00. A successful breach below this crucial support zone could reinforce the bearish bias and put pressure on the pair to test the lower boundary of the descending channel at the level of 146.70
On the upside, the USD/JPY pair could first encounter the nine-day EMA barrier at 149.75. A break above this level could improve the short-term price momentum and support the pair to approach the descending channel’s upper boundary at the 152.00 level.
USD/JPY: Daily Chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
Author
Akhtar Faruqui
FXStreet
Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.
