- USD/JPY climbs 0.87% to 144.83, nearing breakout above the Ichimoku Cloud.
- Strong US jobs report and higher Treasury yields fuel Greenback’s rally.
- Bulls eye 146.00 and May 29 high at 146.28 as next upside targets.
USD/JPY extended its uptrend for two consecutive days, with the major currency pair reaching a new weekly high of 145.09, driven by solid US economic data on Friday. A strong US Nonfarm Payrolls report, rising US Treasury bond yields, and a slightly positive shift on sentiment toward US assets boosted the Greenback. At the time of writing, the pair trades at 144.83, up 0.87%.
USD/JPY Price Forecast: Technical outlook
The major has consolidated within the 142.00-145.00 area for the last five days and, as of writing, is threatening to crack above the Ichimoku Cloud (Kumo), which could open the door for further upside. Nevertheless, the lack of a catalyst so far has kept the USD/JPY pair subdued.
The Relative Strength Index (RSI) turned bullish after jumping sharply above its 50-neutral line. Hence, bulls seem to be gathering some steam.
Given the backdrop, the path of least resistance is tilted to the upside. The first resistance for the USD/JPY would be the 145.00 figure. A breach of the latter will expose Senkou Span B at 145.38. On further strength, traders could challenge 146.00, and May 29 swing high at 146.28. A decisive break would turn the pair bullish, clearing the path to test 150.00.
On the flip side, USD/JPY’s failure to hold above the bottom of the Kumo near 144.25/50 could exacerbate a drop to 144.00 and below. In that outcome, the next key support level, before plummeting sharply to 139.88, would be the June 3 swing low of 142.37.
USD/JPY Price Chart – Daily
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.
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