USD/JPY struggles for a firm direction, holds steady above mid-113.00s

  • USD/JPY extended its sideways consolidative price moves heading into the European session.
  • A cautious market mood underpinned the safe-haven JPY and acted as a headwind for the pair.
  • Hawkish Fed expectations, rising US bond yields benefitted the USD and extended some support.

The USD/JPY pair lacked any firm directional bias and remained confined in a narrow trading band, just above mid-113.00s heading into the European session.

A combination of diverging forces failed to provide any meaningful impetus to the USD/JPY pair and led to a subdued/range-bound price move through the early part of the trading action on Thursday. Despite easing fears about the economic fallout from the new Omicron variant of the coronavirus, escalating geopolitical tensions kept a lid on the recent optimism. This was evident from a softer tone around the equity markets, which benefitted the safe-haven Japanese yen and acted as a headwind for the major.

Investors turned cautious after US President Joe Biden on Tuesday threatened to impose strong economic and other measures on Russia if it invades Ukraine. This comes after the US recently announced that it will not send an official delegation to the 2022 Winter Olympics in Beijing. The move was meant to protest against China's alleged violations of human rights and actions against Muslims in Uyghur. The developments overshadowed the news that the third dose of Pfizer's COVID-19 vaccine neutralized the Omicron variant in lab tests.

That said, the downside remains cushioned amid a modest pickup in the US dollar demand, bolstered by the prospects for a faster policy tightening by the Fed. The markets seem convinced that the Fed would be forced to adopt a more aggressive policy response to contain stubbornly high inflation. This, along with a further recovery in the US Treasury bond yields, underpinned the greenback and extended some support to the USD/JPY pair. Investors, however, preferred to wait on the sidelines ahead of Friday's release of the US CPI report.

The latest US consumer inflation figures would influence the Fed's decision to taper its stimulus at a faster pace and set the stage for an interest rate hike next year. It is worth mentioning that the money markets indicate the possibility for an eventual liftoff in May 2022. Hence, the data will play a key role in driving the USD demand in the near term and help determine the next leg of a directional move for the USD/JPY pair.

Technical levels to watch


Today last price 113.61
Today Daily Change -0.06
Today Daily Change % -0.05
Today daily open 113.67
Daily SMA20 113.96
Daily SMA50 113.52
Daily SMA100 111.75
Daily SMA200 110.62
Previous Daily High 113.95
Previous Daily Low 113.31
Previous Weekly High 113.96
Previous Weekly Low 112.53
Previous Monthly High 115.52
Previous Monthly Low 112.53
Daily Fibonacci 38.2% 113.71
Daily Fibonacci 61.8% 113.56
Daily Pivot Point S1 113.34
Daily Pivot Point S2 113
Daily Pivot Point S3 112.7
Daily Pivot Point R1 113.98
Daily Pivot Point R2 114.28
Daily Pivot Point R3 114.62



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

Latest Forex News

Latest Forex News

Editors’ Picks

EUR/USD struggles to rebound, holds near 1.1150 after US data

EUR/USD trades around 1.1150 in the early American session on Friday as investors assess the latest inflation data from the US. According to the US Bureau of Economic Analysis, Core PCE Price Index rose to 4.9% on a yearly basis in December from 4.7% in November, surpassing the market expectation of 4.8%. 


GBP/USD clings to small gains above 1.3400 on mixed US data

GBP/USD posts modest daily gains slightly above 1.3400 on Friday as the dollar rally loses steam. The data from the US showed that the core PCE inflation edged higher to 4.9% in December. On a negative note, Personal Spending contracted by 0.6% on a monthly basis.


Gold recovers modestly after US data, stays below $1,800

Gold managed to stage a rebound from the multi-week low it set below $1,780 but continues to trade deep in the red near $1,790. The benchmark 10-year US Treasury bond yield is rising more than 1% on the day after US data, limiting XAU/USD's recovery.

Gold News

Bitcoin Weekly Forecast: Federal Reserve cannot tame BTC’s uptrend

Bitcoin has experienced some significant losses over the past few weeks, with a more dramatic drop occurring this week after the Fed's decision was announced. As losses have extended and BTC has entered into the $30,000 zone, concerns regarding Bitcoin being in a bear market have increased.

Read more

Apple share price set to rise after another record quarter

With the Nasdaq closing at its lowest level in seven months yesterday, the Apple share price has also found itself on the end of the recent weakness in tech shares, down over 12% from its record highs in early January.

Read more