USD/JPY Forecast – US Dollar Continues to See Buyers Against Yen

Christopher Lewis
Updated: Jun 2, 2024, 10:01 GMT+00:00

The US Dollar continues to rise against the yen, as the overall trend continues to be a major driver of where we go. With this, I remain bullish but also recognize that the market might be getting a little tired.

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US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a little bit during the early hours on Friday against the Japanese yen as we continue to see the interest rate differential play out. The Japanese yen, of course, is a funding currency, and most certainly is now that even the US dollar offers a significant amount of interest attached to it.

So, there’s not a lot the Bank of Japan can do. They did intervene at one point to send the market back down to the ¥152 level, and since then we’ve seen a pretty big move. It has been volatile at times, but overall, the longer term uptrend is still very much intact and it’s just something you can’t ignore. I like the idea of buying dips in this pair because quite frankly, you get paid at the end of every day and I’ve done quite well doing that over the last several months.

There has been a couple of biter type of moments, but really, at the end of the day, most of the time you’re just sitting there collecting your little bit of swap at the end of every session. After a while, it does add up. So, at this point, I do think that the pair eventually goes to looking to the ¥160 level, but it’s going to take some time to get there.

It’s a little bit of distance from here, and of course we have a certain amount of market memory from that intervention, which was closer to right around 158.50 or so.

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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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