- USD/JPY reversed the weekly bearish gap opening amid a broad-based USD strength.
- The Russia-Ukraine crisis benefitted the USD’s status as the global reserve currency.
- A steep fall in the US bond yields capped any further gains for the buck and the pair.
The USD/JPY pair struggled to capitalize on its strong intraday recovery from the Asian session low and was last seen trading in the neutral territory, around mid-115.00s.
The pair opened with a bearish gap on the first day of a new week, albeit attracted some dip-buying near the 115.20-115.15 region amid a broad-based US dollar strength. The worsening situation in Ukraine turned out to be a key factor that boosted the greenback's status as the global reserve currency.
In fact, Western nations imposed new sanctions on Russia for its invasion of Ukraine, including blocking some banks from the SWIFT international payments system. President Vladimir Putin upped the ante and put nuclear-armed forces on high alert on Sunday, fueling fears about a full-blown East-West conflict.
That said, a slump in the US Treasury bond yields acted as a headwind for the buck and kept a lid on any meaningful upside for the USD/JPY pair, at least for now. Investors seem convinced that the latest geopolitical developments would force the Fed to adopt a less aggressive policy stance to combat high inflation.
This, along with the global flight to safety, triggered a steep decline in the US bond yields. The USD/JPY pair, so far, remained confined below Friday's swing high, around the 115.75 region. This makes it prudent to wait for strong follow-through buying before traders start positioning for any further move up.
In the absence of any major market-moving economic releases, the incoming headlines surrounding the Russia-Ukraine saga will influence the broader market risk sentiment. Apart from this, the US bond yields will drive the USD demand and provide impetus to the USD/JPY pair, allowing traders to grab some opportunities.
Technical levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD stabilizes above 1.1350 on Easter Friday
EUR/USD enters a consolidation phase above 1.1350 on Friday as the trading action remains subdued, with major markets remaining closed in observance of the Easter Holiday. On Thursday, the European Central Bank (ECB) announced it cut key rates by 25 bps, as expected.
GBP/USD fluctuates below 1.3300, looks to post weekly gains
After setting a new multi-month high near 1.3300 earlier in the week, GBP/USD trades in a narrow band at around 1.32700 on Friday and remains on track to end the week in positive territory. Markets turn quiet on Friday as trading conditions thin out on Easter Holiday.
Gold ends week with impressive gains above $3,300
Gold retreated slightly from the all-time high it touched at $3,357 early Thursday but still gained more than 2% for the week after settling at $3,327. The uncertainty surrounding US-China trade relations caused markets to adopt a cautious stance, boosting safe-haven demand for Gold.
How SEC-Ripple case and ETF prospects could shape XRP’s future
Ripple consolidated above the pivotal $2.00 level while trading at $2.05 at the time of writing on Friday, reflecting neutral sentiment across the crypto market.
Future-proofing portfolios: A playbook for tariff and recession risks
It does seem like we will be talking tariffs for a while. And if tariffs stay — in some shape or form — even after negotiations, we’ll likely be talking about recession too. Higher input costs, persistent inflation, and tighter monetary policy are already weighing on global growth.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.