USD/JPY: Still watching out for reciprocal tariff – OCBC

FXStreet Insights Team FXStreet

USD/JPY fell sharply as reciprocal tariff delay led to a turnaround in UST yields. The pair was last seen at 152.60 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Consolidation likely in the interim

"USD/JPY fell, last at 152.60 levels. Daily momentum is flat while RSI fell. Consolidation likely in the interim. Support at 152.50/80 levels (100, 200 DMAs), 151.50 (38.2% fibo retracement of Sep low to Jan high), 150 levels. Resistance at 154.30, 155.30 levels (50 DMA)."

"We believe Japan may not be spared. When it comes to automobiles, Japanese cars are amongst the top 5 most popular in US and Korean cars make it to the top 10 list. On agricultural products, Japan has a high tariff rate of 204.3% for rice and 23.3% for meat."

"The risk is a direct tariff hit on Japanese goods and JPY may come under pressure in this scenario. In fact, Trump yesterday ordered his administration to consider imposing reciprocal tariffs on numerous trading partners, singling out Japan and South Korea as nations that he believes are taking advantage of the US."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

EUR/USD keeps its focus on 1.1800

EUR/USD is holding its ground near two-day highs around 1.1750 as Thursday’s session is drawing to a close. The pair is drawing support from a more constructive risk mood, helped by easing EU–US trade tensions and a softer US Dollar. Looking ahead, attention shifts to Friday’s flash PMI releases from both Europe and the US.

GBP/USD flirts with 1.3500 on persistent USD selling

GBP/USD is regaining momentum on Thursday and pushing up towards two-week highs around the 1.3500 mark. In the process, Cable is leaving Wednesday’s brief wobble behind and slipping back into its upward trend, helped by ongoing selling pressure on the Greenback ahead of key advanced PMI data on Friday.

Gold continues scaling new record highs, climbs above $4,950

Gold extends its record-setting rally for the fifth consecutive day on Friday, as persistent geopolitical uncertainties continue to drive safe-haven flows. Meanwhile, expectations for further policy easing by the Federal Reserve contribute to the de-dollarization trend and further underpin the non-yielding bullion, which remains on track to register gains for the third successive week and appears unaffected by extremely overbought conditions.

Bank of Japan expected to hold rates, markets seek clues on further tightening

The Bank of Japan is expected to leave its benchmark interest rate unchanged at 0.75% after concluding its two-day monetary policy meeting next Friday. The Japanese central bank hiked rates to its highest level in three decades in December, and will likely stand pat on Friday to better assess the economic consequences of previous rate hikes.

Trump walks back NATO tariffs, signals de-escalation

What began as a sharp escalation risk quickly turned into a de-escalation signal. Earlier this week, markets briefly priced in escalation risk after Donald J. Trump proposed a 10% tariff hike on eight NATO nations amid the Greenland dispute.

XRP defends $1.90 support as ETFs attract inflows despite retail caution

Ripple (XRP) is consolidating above $1.90, a short-term support level, at the time of writing on Thursday. This mild uptick marks two consecutive days of a strengthening technical outlook, following recent market-wide volatility.