USD/JPY Price Forecast – US Dollar Bounces

US Dollar vs Japanese Yen Technical Analysis

The US dollar has rallied a bit during the trading session on Friday as it looks like we are threatening the 50-Day EMA. Ultimately, this is a market that continues to see a lot of bullish pressure, and therefore I think we are more likely than not trying to get to the ¥135 level. Ultimately, this is a market that I think is going to show that area as being important, and if we break above it, then we could continue the longer-term uptrend.

At the end of the day, you need to pay close attention to the bond markets, because this is all about bond yield differential. For example, if the 10-year yield in America rises, that only puts more pressure on bond markets around the world to compete, meaning that the Bank of Japan will have to continue to buy unlimited bonds in order to keep yields down to 0.25% on their ten year. That’s essentially what is been the case for the last several months, so it’ll be interesting to see if we have to go back in that direction. However, if yields start to drop across the board, then that helps the yen, mainly because the Bank of Japan will not have to put as much work in.

Remember, buying bonds is essentially going to be the same thing as printing currency, so that explains why the yen has been so weak, not only against the US dollar but multiple other currencies as well. Keep in mind that most central banks around the world are tightening monetary policy, making the yen particularly vulnerable.

USD/JPY Price Forecast Video for 15.08.22

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