US Dollar Continues to Rise Against the Japanese Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has initially pulled back just a bit against the Japanese yen during the trading session on Thursday but then turned around to show signs of life yet again. At this point, the market looks very likely to continue seeing upward pressure as the Bank of Japan has been having to step into the bond market to fight rising interest rates. As long as that interest rate differential continues to be as wide as it is, the market will then punish the Japanese yen.

It is worth noting that the ¥125 level above has offered resistance, not only over the last couple of weeks but over the last several years. Because of this, you need to be very cautious in that general vicinity but if we get an explosive move above that level, it could be a major turn of events. At that point, the USD/JPY pair would almost certainly be a “buy-and-hold” type of situation. The market participants at that point would become very aggressive, but between now and then the market may have to go sideways in order to work off some of the froth.

A pullback obviously is very possible, but we need to see some type of reason to get away from the US dollar and run to the Japanese yen. Right now, that does not seem very likely, so I believe given enough time we will more than likely at least attempt to break above the ¥125 level. Whether or not it sticks would be a completely different question. If we do pull back, I anticipate that the ¥120 level should be a major support level.

USD/JPY Price Forecast Video 08.04.22

For a look at all of today’s economic events, check out our economic calendar.