• The USD/JPY price analysis shows strength in the yen after Ueda’s comments.

• The BoJ will hike rates if the economy re-accelerates.

• Data revealed soft business activity in the US manufacturing sector.  

The USD/JPY price analysis shows strength in the yen after BoJ’s Ueda said the central bank would hike rates if growth re-accelerates. At the same time, the yen strengthened as safe-haven demand rose on renewed trade tensions between the US and its trading partners.

–Are you interested to learn more about MT5 brokers? Check our detailed guide-

Bank of Japan Governor Kazuo Ueda said on Tuesday that the central bank would hike rates if the economy re-accelerated. He also noted that wage growth must re-accelerate. At the moment, Trump tariffs have dimmed the outlook for the economy. Therefore, it might not be the best time to hike interest rates. However, if the economy rebounds after a brief pullback, policymakers will be ready to hike. This news boosted the yen.

Furthermore, the yen continued its rally as safe-haven demand rebounded on trade tensions. Trump promised to double tariffs on steel and aluminum imports. The move will likely increase trade tensions between the US and its partners, like Canada and the Eurozone. Moreover, it revealed that Trump was going on with his tariff campaign. Therefore, the risk of a global trade war remains. 

Elsewhere, the dollar eased after data revealed soft business activity in the US manufacturing sector. The ISM PMI came in at 48.5, below estimates of 49.3. The decline showed the effects of Trump’s tariffs on the US economy. Traders will now wait to see employment figures.

USD/JPY key events today

USD/JPY technical price analysis: Bears challenge the 142.55 support

On the technical side, the USD/JPY price is testing a major support at the 142.55 level. It trades below the 30-SMA with the RSI under 50, suggesting a bearish bias. The price recently reversed to the downside when it broke and stayed below the 30-SMA. 

–Are you interested to learn more about Australian forex brokers? Check our detailed guide-

Furthermore, although there was a strong rebound at the 142.55 level, it only made a lower high. This is a sign that bulls could not sustain a move above the 30-SMA. As a result, bears returned to push USD/JPY below the SMA. 

At the moment, the price is challenging the 142.55 support. A break below this level will make a lower low, confirming a continuation of the downtrend. Moreover, such a move would allow bears to target the 140.01 support level.

Looking to trade forex now? Invest at eToro!

68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.