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MENAFN- Daily Forex)
For two consecutive days, the USD/JPY currency pair has been attempting to recover from recent selloffs that pushed it towards the support level of 153.71. Meanwhile, its recent gains extended to the resistance level of 155.80 before settling around 155.25 at the time of writing this analysis. Obviously, this is after interacting with the US Federal Reserve's announcement to keep US interest rates unchanged as expected.
The Japanese Yen is still affected by central bank policies
According to Forex market trading, the Japanese Yen had recorded gains against the rest of the other major currencies, the highest for the Japanese currency in five weeks, and its gains came as the stricter policy by the Bank of Japan this year regained the spotlight after the US Federal Reserve fixed the interest rate. The minutes of the Bank of Japan's December meeting recently revealed that the Japanese central bank is maintaining a cautious stance on monetary policy adjustments, based on inflation trends, wage growth and global economic risks.
However, the Bank of Japan raised the interest rate, and revised inflation forecasts higher at its January meeting, supporting market bets that the Japanese central bank is scheduled to continue tightening policy this year. In return, Asian currencies also received support from easing concerns about tariffs by the new US presidential administration amid conflicting comments on trade restrictions by government officials.
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We still recommend buying the dollar/Japanese yen from every downward level as Trump's policies may ultimately benefit the US dollar Stocks Halt Recent Losses
During yesterday's trading session, according to stock trading companies' platforms, US stock indices pared their losses after the Federal Reserve left US interest rates unchanged, as expected. Meanwhile, the markets awaited a set of key earnings and continued to assess the impact of potential tariffs on major trading partners. By trade, the S&P 500 closed down 0.5%, the Nasdaq 100 fell 0.5%. Also, the Dow Jones Industrial Average ended down 0.3%, with the S&P 500 and Nasdaq 100 paring their losses by 0.8% in the afternoon.
For its part, the US Federal Reserve indicated that growth remained steady and that the labour market was stable at strong levels, while its statement lacked a previous paragraph that referred to progress in declining inflation. Nvidia shares remained in the spotlight with a 4% decline, extending their volatile momentum after claims of effective AI models from China risked the urgent need for more AI infrastructure. Meanwhile, the performance of Microsoft, Meta, and Tesla shares was mixed before their earnings after the closing bell. On a more positive note, T-Mobile US shares rose 6.3% after reporting stronger-than-expected earnings.
EURUSD Chart by TradingViewUSD/JPY Technical Analysis and Expectations Today:
According to trading on the daily chart, the USD/JPY currency pair is trying to stop the downward correction path. Meanwhile, the strong control for the bulls will not return without returning to the vicinity of the resistance levels of 156.80 and 158.00, respectively. The last level will stimulate the move towards the psychological resistance of 160.00, with which the talk about the imminent Japanese intervention in the forex markets increases, in addition to the movement of technical indicators towards strong overbought levels. In return, and in the same time frame, the support level of 153.20 will remain the most important for strong control of the bears over the direction. The USD/JPY price today will be affected by the announcement of the US economic growth reading and the number of weekly jobless claims, in addition to the extent of investors' appetite for risk or not.
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