USD/JPY posted a remarkable performance with five consecutive days of gains, hitting a two-week high around 158.50.
The combination of worrying Japanese inflation data and the resilience of the US economy has pushed the pair to one of its strongest weekly closes this year.
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✅ JPY: Pressured by Imported Inflation & Middle East Risks
The Japanese Yen is on the defensive due to global cost pressures:
- Japanese PPI Surge: Data released today showed the Japanese Producer Price Index jumped 4.9% year-on-year in April. This increase was driven by high energy import costs due to ongoing conflicts in the Middle East and disruptions in the Strait of Hormuz.
- Intervention Risk: The only factor holding back further gains in USD/JPY is the market's "fear" of verbal or physical intervention from Japanese authorities if the price approaches the psychological level of 160.00.
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✅ USD: Driven by a Resilient "Trio" of US Data
The US dollar remains king in the forex market this week:
- Interest Rate Speculation: Markets are now starting to seriously consider a Fed rate hike by the end of 2026.
- Diplomatic Stability: Despite Trump's threats against Iran, the success of the constructive dialogue between Trump and Xi Jinping (which was welcomed by the IMF) has reduced global trade uncertainty, providing a supportive environment for the USD to strengthen against low-yielding currencies like the JPY.
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✅ USD/JPY Technical Analysis (Intraday)
Technically, the market structure strongly favors buyers (bullish):
- ⚡Immediate Resistance (158.80 - 159.20): This area is the last obstacle before the pair attempts to break through the psychological level of 160.00.
- ⚡Crucial Support (157.00 - 157.50): Any intraday correction (pullback) will likely be viewed as a buying opportunity by the market as long as the price remains above this zone.
- ⚡Momentum Indicator: Five consecutive days of gains indicate strong bullish momentum, but traders remain wary of volatility at Friday's market close (profit taking).
The combination of worrying Japanese inflation data and the resilience of the US economy has pushed the pair to one of its strongest weekly closes this year.
---------------------------------------------------------------------------------------------------
✅ JPY: Pressured by Imported Inflation & Middle East Risks
The Japanese Yen is on the defensive due to global cost pressures:
- Japanese PPI Surge: Data released today showed the Japanese Producer Price Index jumped 4.9% year-on-year in April. This increase was driven by high energy import costs due to ongoing conflicts in the Middle East and disruptions in the Strait of Hormuz.
- Intervention Risk: The only factor holding back further gains in USD/JPY is the market's "fear" of verbal or physical intervention from Japanese authorities if the price approaches the psychological level of 160.00.
---------------------------------------------------------------------------------------------------
✅ USD: Driven by a Resilient "Trio" of US Data
The US dollar remains king in the forex market this week:
- Interest Rate Speculation: Markets are now starting to seriously consider a Fed rate hike by the end of 2026.
- Diplomatic Stability: Despite Trump's threats against Iran, the success of the constructive dialogue between Trump and Xi Jinping (which was welcomed by the IMF) has reduced global trade uncertainty, providing a supportive environment for the USD to strengthen against low-yielding currencies like the JPY.
---------------------------------------------------------------------------------------------------
✅ USD/JPY Technical Analysis (Intraday)
Technically, the market structure strongly favors buyers (bullish):
- ⚡Immediate Resistance (158.80 - 159.20): This area is the last obstacle before the pair attempts to break through the psychological level of 160.00.
- ⚡Crucial Support (157.00 - 157.50): Any intraday correction (pullback) will likely be viewed as a buying opportunity by the market as long as the price remains above this zone.
- ⚡Momentum Indicator: Five consecutive days of gains indicate strong bullish momentum, but traders remain wary of volatility at Friday's market close (profit taking).
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.