The Japanese Yen (JPY) continues its intraday decline from its highest level in over a week, touching against a broadly weaker US Dollar earlier this Monday, and filling the weekly bullish gap during the first half of the European session. Speculation that Prime Minister Sanae Takaishi may soon call early elections to consolidate her power and promote expansionary fiscal policy is acting as a headwind for the Japanese yen. However, a warning of possible intervention by Japanese Finance Minister Satsuki Katayama to counter the weakness of the local currency, may act as a tailwind for the Japanese yen.
Moreover, expectations of an early interest rate hike by the Bank of Japan (BoJ) should help limit the JPY’s losses. Meanwhile, US President Donald Trump on Saturday pledged to impose tariffs on eight European countries that opposed his plan to seize Greenland, raising trade war fears again. This, coupled with rising geopolitical tensions, dampens investors’ appetite for riskier assets and could provide further support to the safe-haven Japanese yen. On the other hand, the US dollar is retreating from its highest level since December 9. This requires some caution before asserting that USD/JPY’s rebound from the 18-month high it touched last week has run its course and is positioned for any further recovery.
The Japanese yen attracts sellers during the day as bulls appear hesitant amid political uncertainty
- Japanese Finance Minister Satsuki Katayama said on Friday that all options, including direct and coordinated intervention with the United States, are being considered to address recent weakness in the Japanese yen.
- The Reuters report, citing sources, suggests that some policymakers within the Bank of Japan see room to raise interest rates sooner than markets currently expect, as early as April, providing further support to the Japanese yen.
- US President Donald Trump has threatened to impose 10% tariffs on goods from eight European countries from February 1 until the US is allowed to buy Greenland, sparking a new wave of risk-averse trading.
- EU ambassadors reached a broad agreement on Sunday to step up efforts to dissuade Trump from imposing tariffs on allies, while also preparing retaliatory measures if the tariffs go ahead.
- Furthermore, geopolitical risks from the long war between Russia and Ukraine and ongoing concerns about a potential US military strike against Iran benefit the Japanese yen’s safe-haven status at the start of the new week.
- The US dollar is attracting heavy selling as fresh trade war fears spark a crisis of confidence in US assets, offsetting lower bets on two more interest rate cuts by the US Federal Reserve by the end of this year.
- Japanese Prime Minister Sanae Takaishi is reportedly planning to dissolve parliament and call early parliamentary elections in the first half of February to garner public support for her fiscally expansionary policies.
- With Takaishi’s popularity growing, a victory would strengthen her coalition government’s parliamentary majority and enhance her authority to pursue her spending plans, something that calls for caution for yen bulls.
- Traders may also choose to wait for the release of the US Personal Consumption Expenditures (PCE) price index on Thursday and the Bank of Japan’s crucial monetary policy decision on Friday before placing new directional bets.
The USD/JPY pair is rebounding from the 61.8% Fibonacci retracement levels. near 157.45-157.40; He’s not out of the woods yet
USD/JPY finds good support near the 61.8% Fibonacci retracement level of the recent upward move from the monthly high. Subsequent strength beyond the 50% retracement level, around the 157.80 area, could pave the way for further gains, although a stronger recovery would need additional momentum confirmation.
The Moving Average Convergence Divergence (MACD) indicator is hovering just below the zero line as readings stabilize towards -0.01, indicating fading downward pressure. The Relative Strength Index (RSI) is at 43 (bearish-neutral), consolidating after the previous oversold decline.
At the same time, USD/JPY is trading below the 100-hourly simple moving average (SMA) around the 158.55 area, which should cap rallies. A close back above this average would result in a bullish tone in the near term.
(The technical analysis for this story was written with the help of an artificial intelligence tool.)
Japanese yen price today
The table below shows how much the Japanese Yen (JPY) has changed against the major currencies listed today. The Japanese yen was the strongest against the US dollar.
| US dollars | euro | GBP | JPY | Canadian | Australian dollar | New Zealand dollar | Swiss franc | |
|---|---|---|---|---|---|---|---|---|
| US dollars | -0.19% | -0.07% | -0.02% | -0.17% | -0.11% | -0.30% | -0.42% | |
| euro | 0.19% | 0.12% | 0.20% | 0.03% | 0.09% | -0.11% | -0.23% | |
| GBP | 0.07% | -0.12% | 0.08% | -0.09% | -0.03% | -0.22% | -0.35% | |
| JPY | 0.02% | -0.20% | -0.08% | -0.17% | -0.11% | -0.30% | -0.42% | |
| Canadian | 0.17% | -0.03% | 0.09% | 0.17% | 0.06% | -0.12% | -0.26% | |
| Australian dollar | 0.11% | -0.09% | 0.03% | 0.11% | -0.06% | -0.20% | -0.32% | |
| New Zealand dollar | 0.30% | 0.11% | 0.22% | 0.30% | 0.12% | 0.20% | -0.13% | |
| Swiss franc | 0.42% | 0.23% | 0.35% | 0.42% | 0.26% | 0.32% | 0.13% |
The heat map shows the percentage changes in major currencies versus each other. The base currency is chosen from the left column, while the counter currency is chosen from the top row. For example, if you select the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent the Japanese Yen (base)/US Dollar (quote).
