USD/JPY declined to 142.55, following a drop in the US dollar and US Treasury yields. The unexpected rise in CPI data indicates ongoing discussions about normalizing monetary policy by the Bank of Japan (BoJ). Japanese trade negotiator Akazawa met with US officials over the weekend for trade talks, with more meetings scheduled. Prime Minister Ishiba also spoke with former President Trump about tariffs, with a potential face-to-face meeting on the horizon.

Technical Analysis

USD/JPY remains bearish on the daily momentum scale, with the RSI also falling. Key support levels are at 142.40 and 142, while resistance is found at 144.40/60 and 145.80. There’s currently a short position aiming for 141, with a stop-loss at 151. This content is for informational purposes only and involves risk. Thorough research is essential before making any investment decisions. The information does not act as a recommendation for trading. The drop in USD/JPY aligns with the overall decline in the dollar and Treasury yields. The unexpected CPI data adds pressure on Japan’s monetary policymakers. Stronger-than-expected consumer prices hint that the BoJ might tighten policy or decrease support in the future. Akazawa’s trade discussions with the US show the need for stable economic connections as policy signals grow more complex. Ishiba’s call to Trump about trade tariffs indicates efforts to strengthen trade ties, which could help reduce financial uncertainty, especially as exchange rate tensions increase.

Market Outlook

The mood remains bearish from a momentum standpoint. Current price trends support this view—daily technical indicators are weakening, momentum indicators like the Relative Strength Index are dropping, and sellers are gaining control below important levels. If the price breaks below 142.40 and then 142.00, it will likely lead to 141.00, a target for those in short positions managing their risks closely. Conversely, if the price rises above 144.40, it will challenge the bearish outlook, especially if momentum shifts. The higher resistance level at 145.80 may come into play if investor appetite changes or unexpected fiscal or monetary news arises. Exceeding these upper levels could undermine bearish scenarios; 151 is already a critical defensive level. We advise caution in interpreting recent market positioning. Given the fast-changing macro factors—whether data-related or geopolitical—slow reactions to market shifts could be detrimental. The dynamics around 142.00 will be crucial in the coming weeks. If downward pressure continues without resistance at 142.40, further declines are likely. Responding dynamically to the market is essential. Current pricing is increasingly sensitive to US inflation surprises and Japan’s monetary signals. Forward-looking strategies should rely on real-time technical indicators as well as potential outcomes from future trade discussions. Create your live VT Markets account and start trading now.

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