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MENAFN- Daily Forex)
Currency traders failed to achieve an upward rebound for the USD/JPY currency pair; its slight gains did not exceed the 143.27 level, and it quickly returned to its stronger downward path, despite strong US retail sales figures. USD/JPY trading is stabilizing around the 141.66 level at the time of writing the analysis, paving the way for a more violent downward move.
Why does the USD/JPY continue to move strongly downward?
According to Forex market trading, the Japanese Yen's gains against other major currencies increased, with the widespread weakness of the US dollar continuing. Growing concerns about the economic repercussions of a potential new round of US tariffs contributed to the decline of the US dollar. In the latest development in trade policy, US President Donald Trump ordered an investigation into the possibility of imposing tariffs on all essential US metal imports, much of which comes from China. This move has increased investor anxiety, adding pressure on the dollar. Meanwhile, attention is shifting to upcoming trade talks between Japan and the United States, as Tokyo is striving for the complete abolition of Trump's tariffs.
On the Japanese front, traders absorbed data showing an eight-month high in Japanese manufacturing sector confidence for April. However, the outlook remains cautious amid ongoing concerns about US trade policy.
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Dear TradersUp website follower, be cautious; USD/JPY will be affected by the direction of central bank policies and the reaction to the paths of global trade wars Future of the Bank of Japan's Policy Amid Trump's Tariffs
In this regard, Bank of Japan Governor Kazuo Ueda stated in an interview with the Sankei newspaper that the BOJ may consider taking policy action if US tariffs harm the Japanese economy. He added, "Taking policy action may become necessary," noting that the risks posed by US President Trump's trade actions have approached the "bad scenario" anticipated by the central bank.
The governor acknowledged that recent developments are already affecting business and household confidence. While the Board still plans to raise interest rates at an "appropriate pace," Ueda stressed the importance of assessing the economic impact of US tariffs without prejudging them. He added that domestic food price inflation is likely to decline, real wages are expected to rise mid-year, and that upside and downside risks remain regarding inflation expectations.
The Bank of Japan will hold a monetary policy meeting from April 30 to May 1, where it will also release updated economic forecasts .USD/JPY Technical analysis and Expectations Today:
Dear reader, as clearly shown on the daily chart, the overall trend for the USD/JPY currency pair remains bearish. Also, the return to the vicinity of the current support at 141.60 signals a deeper downward move. The psychological support at 140.00 will be an easy target for the bears, and until it moves towards or away from it. Furthermore, technical indicators have moved towards strong oversold zones , as is the case with signals from the MACD, RSI, and other momentum indicators. Therefore, we recommend buying USD/JPY from the vicinity of the support levels 140.90, 140.00, and 139.20 respectively, with future targets at 143.20 and 145.00 respectively, and the stop-loss remains below the 138.00 support.
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