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Category: Forex News, News

USD/JPY Analysis Today 03/06: Stable Around Levels (Chart)

By Published On: June 3, 20242.8 min readViews: 1990 Comments on USD/JPY Analysis Today 03/06: Stable Around Levels (Chart)

  • At the end of last week’s trading, the Japanese yen stabilized against the US dollar after Japan confirmed that the government intervened in the forex market for the first time since 2022.
  • Meanwhile, traders may not have been convinced by the bullish shift in the yen because investors wanted more intervention.
  • According to forex trading, the US dollar against the Japanese yen USD/JPY price stabilizes around the resistance level of 157.30, close to the levels of Japanese intervention in the markets.

For its part, the Japanese Ministry of Finance confirmed on Friday that it spent $62.25 billion on currency intervention between April 26 and May 29. This action came after the yen collapsed to its lowest level in 34 years against the dollar. The last time the Japanese government participated in currency intervention was in October 2022. Although this announcement did not come as a surprise, traders may have wanted more. In addition, based on the comments, this may be the only measure Tokyo will use going forward. However, Japanese Finance Minister Shunichi Suzuki told CNBC earlier this month that his Favors supporting the yen to avoid a backlash from households and businesses.

This year, the Japanese yen has been under tremendous pressure, despite the Bank of Japan ending its negative interest rate policy and improving consumer sentiment. Overall, the yen is down 11.2% year-to-date against the dollar, and is set to post a monthly decline of 2.5%.

Meanwhile, in the United States, financial markets have been combing through the latest US inflation data, which confirmed that progress on inflation has stalled. As the report noted, “All eyes were on the Fed’s preferred inflation gauge, the personal consumption expenditures (PCE) price index. In April, the PCE price index rose 0.3% on the month and held steady at 2.7%. Moreover, core personal consumption expenditures, which exclude the volatile energy and food components, jumped less than expected at 0.2% and were flat at 2.8%.

The consensus was that PCE confirmed a pause in progress on inflation and that the latest leg in the inflation fight will be a slow grind. As a result, the Federal Reserve could keep interest rates higher for longer. Accordingly, investors are not expecting a rate cut until November, according to the CME FedWatch tool.

USD/JPY Technical Analysis and Expectations Today

USD/JPY has now risen to trade at its 100-hour moving average. However, the pair still appears to have more room to run before reaching overbought levels on the 14-hour Relative Strength Index (RSI). In the near term, based on the hourly chart, USD/JPY appears to be trading within an ascending channel. The 14-hour RSI has also bounced back to move towards overbought levels. Therefore, bulls will target extended gains around 157.70 or higher at the 158.25 resistance. On the other hand, bears will look to pounce on pullbacks around 156.43 or lower at 155.87.

In the long term, based on the daily chart, USD/JPY appears to be trading within an ascending channel. Also, the 14-day RSI appears to support the upside as it approaches overbought levels. Therefore, bulls will look to ride the current winning streak towards 160.15 or higher to the 163 resistances. On the other hand, bears will look to pounce on longer-term pullbacks around 153.52 or lower at the 150.00 support.

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