Potential Signal
- If we can rise above 153.50 after Friday’s CPI report, we will consider purchasing with a stop at 152 and a target of 157.
The U.S. dollar began to gain against the Japanese yen on Thursday, but then it lost strength. Right now, it seems we are testing the 200-day EMA, which definitely requires close observation.
The 152 yen mark has been a support area so far, and if the dollar can break through, there’s a chance it might rally further. I’ll be keeping an eye on the direction things take following the CPI results. The narrative could shift significantly if the U.S. employment report comes in higher than anticipated along with rising inflation.
Debt Burden and Historical Resilience
There’s a general expectation that the Japanese government will come together to push for some growth. However, the Bank of Japan has substantial debt and might struggle to raise funds amid rising interest rates. Logically, I believe improvements are likely, though it may require time to fully materialize.
If we look at the long-term charts, there’s a significant resistance around 160 yen that dates back to 1989 and 1990. The drop back to the 152 yen level under these circumstances isn’t particularly alarming. We still need to see if the momentum can build. A strengthening U.S. dollar against other currencies could change the situation as well.
I’m considering trading our USD/JPY Forex analysis and here’s a list of some Japanese forex brokers I’m exploring.
With over 20 years of experience in financial markets, Christopher Lewis specializes in foreign exchange trading. He has contributed to various platforms since the early days of Daily Forex, as well as writing for publications like FX Empire, Investing.com, and his own site, The Trader Guy. He enjoys using technical analysis for trade identification and prefers a long-term trading approach, often holding trades for days or weeks.
