The Japanese yen is receiving slight support from verbal interventions by Japanese authorities, as well as shifts in global risk sentiment. In addition to this, a modest decline in the U.S. dollar is steering the USD/JPY pair away from a two-month peak.
However, against the backdrop of expectations that the Federal Reserve will maintain interest rates at a high level longer than anticipated, and a stronger U.S. Consumer Price Index (CPI) report supports this, the decline of the U.S. dollar from its highest level since November 14 seems short-lived.
The hawkish forecast continues to support the rise in U.S. Treasury yields, thereby increasing the interest rate differential between Japan and the U.S. This should limit the yen's depreciation and further contribute to restricting the potential decline of the USD/JPY pair.
From a technical perspective, yesterday's upward momentum can be seen as a new push for the bulls and, during a correction, may prepare the ground for additional growth. However, on the daily chart, the Relative Strength Index (RSI) hovers near the overbought zone, requiring some caution. Nevertheless, any further corrective decline may attract new buyers around 150.30, limiting losses for the USD/JPY pair near the round level of 150.00. But in case of a breakthrough, technical selling may be triggered.
On the other hand, the region of 150.90, or the multi-month peak reached yesterday, now acts as an immediate obstacle. Sustained strength could propel the USD/JPY pair further towards the intermediate barrier at 151.47 on the way to the multi-year peak set in October 2022 and retested in November 2023. This round figure is at 152.00.
The table below shows the percentage change of the Japanese yen against major currencies listed today.
The Japanese yen was the strongest against the Canadian dollar.