Start Trading Now Get Started
Affiliate Disclosure
Affiliate Disclosure DailyForex.com adheres to strict guidelines to preserve editorial integrity to help you make decisions with confidence. Some of the reviews and content we feature on this site are supported by affiliate partnerships from which this website may receive money. This may impact how, where and which companies / services we review and write about. Our team of experts work to continually re-evaluate the reviews and information we provide on all the top Forex / CFD brokerages featured here. Our research focuses heavily on the broker’s custody of client deposits and the breadth of its client offering. Safety is evaluated by quality and length of the broker's track record, plus the scope of regulatory standing. Major factors in determining the quality of a broker’s offer include the cost of trading, the range of instruments available to trade, and general ease of use regarding execution and market information.

USD/JPY Forecast: USD Continues to Threaten the YEN

By Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Modest rally indicates strength, eyeing 149-152 yen levels. Fed rate policies and YEN's central bank stance influence market, favoring USD amid speculation of ongoing safe-haven demand.

  • The US dollar is showing signs of potential strength against the Japanese yen, with indications pointing towards a breakout above resistance levels.
  • Despite recent fluctuations, the yen appears to be facing dwindling demand among investors.
  • There were some that were calling for the Bank of Japan to tighten, but that is something that is tantamount to a pipe dream.
  • Hard to believe that the debt out there for the Japanese can be financed with anything more than negative rates, but some believed it seemed at the start of the year.

In Wednesday's trading session, the dollar recorded a modest rally against the Japanese yen, signaling a possible reversal and a return to higher levels. Although market conditions remain somewhat volatile, the US dollar's resilience is notable, especially considering the speculation surrounding potential Federal Reserve rate cuts. However, it's essential to note that the comparison is against the Japanese yen, a currency that traditionally struggles due to its central bank's loose monetary policy.

Top Forex Brokers

1
Get Started 74% of retail CFD accounts lose money Read Review

Supporting the dollar's upward momentum is the 50-day Exponential Moving Average, which has consistently provided a strong foundation during recent trading sessions. Looking ahead, there's a possibility of further gains, with targets set around the 149 yen level, potentially extending to 152 yen. The prevailing interest rate differentials favor the US dollar, making it challenging for the Japanese yen to assert significant strength, particularly given the dollar's status as a safe-haven currency.

USD/JPY Forecast Today - 08/02: USD Gains on YEN (Graph)

Market Sentiment and the Fed

Market sentiment seems to be aligning with the notion that the Federal Reserve might maintain a more conservative monetary stance for an extended period, fueling expectations of continued upward pressure on the USD/JPY pair. This sentiment, combined with the yen's inherent weaknesses, suggests a favorable environment for selling the Japanese yen against not only the US dollar but also other major currencies.

In the end, the US dollar is poised to exert further pressure against the Japanese yen, with indications pointing towards a potential breakout above resistance levels. Market dynamics, including interest rate differentials and central bank policies, are likely to continue favoring the US dollar's strength relative to the Japanese yen. Consequently, investors may find opportunities in selling the yen across various currency pairs, reflecting the broader sentiment of weakening demand for the Japanese currency.

Ready to trade our Forex daily forecast? We’ve shortlisted the best forex broker list for you to check out. 

Christopher Lewis
Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.

Most Visited Forex Broker Reviews