USD/JPY Forecast – US Dollar Continues to Look Strong Against Yen

Christopher Lewis
Published: Apr 17, 2024, 13:44 GMT+00:00

The US dollar continues to see a lot of upward pressure against the Japanese yen, as the interest rate differential continues to favor the greenback, especially on Wednesdays, when the swap is triple.

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US Dollar vs Japanese Yen Technical Analysis

Wednesday is another day where we continue to see the US dollar find buyers on dips against the Japanese yen, which makes quite a bit of sense considering that differential is wide. Furthermore, Wednesday will be a triple swap, so that means people get paid three times as much as usual for the position at the end of the day.

So therefore, Wednesdays typically end up being a good day to short the yen. We are extended at this point though, and the ¥155 level above is more likely than not going to be a major barrier. So do keep that in mind. If we can break above the ¥155 level, then I think that we are looking to the ¥157 level. Beyond that, I think we could go even higher given enough time.

Short term pullbacks continue to find plenty of buyers, especially near the ¥152 level. But really, at this point in time, I don’t know that we will pull back that far. The Bank of Japan can’t do anything to raise interest rates, and the Federal Reserve is likely going to be very hesitant to cut rates in an environment that sees so much inflation.

Because of this, any dip at this point in time probably continues to be a buying opportunity. And of course, I will add to an already existing position just simply taking advantage of swap. At the end of the day and of course, price appreciation. This has been a core holding for some time, and I don’t see that changing anytime soon.

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

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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