USD/JPY Price Forecast – The US Dollar Continues to Power Higher Against Yen

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied again against the Japanese yen during the trading session on Friday as the jobs number came out in the United States. As yields continue to climb in the US, it makes sense that we would see the US dollar strengthen a bit. That being said, the Bank of Japan is light years away from doing anything remotely close to tightening monetary policy, so this sets up a bit of a “perfect storm.”

The ¥131 level is an area of resistance that will continue to be paid close attention to, but I do think that we break through it eventually. The short-term pullback should continue to offer buying opportunities, not only because of the strength of the greenback, but also the weakness of the Japanese yen. As long as the Bank of Japan is going to continue to buy bonds to fight interest rates rising, it’s essentially “printing yen”, thereby it’s going to continue to flood the system with liquidity.

When you look across the Forex spectrum, the Japanese yen has been beaten up rather drastically by most currencies, and I do think that continues to be the case. Quite frankly, at this point, it would take the Bank of Japan to reverse its entire policy in order for the yen to rally for anything more significant than a correction. Once we break above the ¥131 level, I believe that the USD/JPY pair will go looking to reach the ¥135 level next. Underneath, I see a massive amount of support just above the 50 Day EMA.

USD/JPY Price Forecast Video 06.06.22

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