USD/JPY nears previous high, waiting for breakthrough
2025-10-27 13:57:02
The Japanese yen continued its downward trend during Asian trading on Monday, hitting a two-week low against the US dollar. Market concerns that Japan's new Prime Minister Sanae Takaichi will implement expansionary fiscal policies and slow the pace of austerity have put pressure on the safe-haven yen.
Meanwhile, signs of easing global trade tensions boosted risk appetite, further weakening demand for the yen. Although Japan's services sector inflation rose for the second consecutive month in September, bolstering expectations for a potential Bank of Japan (BoJ) rate hike, yen bulls did not appear to be significantly encouraged.
On the contrary, the US dollar, dragged down by the Federal Reserve's (Fed) dovish expectations, failed to attract buying in the short term, limiting further gains in USD/JPY. Investors also tended to wait and see, awaiting the Fed's policy updates on Wednesday and the Bank of Japan's policy updates on Thursday.
According to market research, Japan's service sector producer price index rose to 3.0% in September, higher than 2.7% in August, indicating high inflation, but the new prime minister's pro-stimulus policy has made the market skeptical about further policy tightening.
Growing expectations of a Fed rate cut also curbed the dollar's rebound, supporting the low-yielding yen and limiting the upside of USD/JPY.
Analysts pointed out: "The yen is under short-term pressure. Investors remain cautious before the key meetings of the Federal Reserve and the Bank of Japan. In the short term, attention should be paid to the resistance of $153.25 and the support of $152.65."
From a technical perspective, if USD/JPY breaks through the resistance level of $153.25–153.30, it will trigger a new round of long buying and may further rise to the $154.00 level, followed by targets of $154.75–154.80 and the psychological level of $155.00.
Support is concentrated at $152.65, the Asian session low. A break below this could lead to a slide towards $152.25 and $152.00. Further losses could trigger a test of the $151.10–$151.00 support zone. The overall daily chart is bullish, but key support and resistance levels remain a concern in the short term.
Editor's opinion:
The yen's short-term performance is influenced by expectations for Japan's fiscal policy and the easing of global trade tensions. Investors are cautiously watching ahead of key Federal Reserve and Bank of Japan meetings. Short-term resistance at $153.25 and support at $152.65 are key targets. Overall volatility is bullish, but caution is advised regarding the risk of a pullback if a breakout fails.
Meanwhile, signs of easing global trade tensions boosted risk appetite, further weakening demand for the yen. Although Japan's services sector inflation rose for the second consecutive month in September, bolstering expectations for a potential Bank of Japan (BoJ) rate hike, yen bulls did not appear to be significantly encouraged.
On the contrary, the US dollar, dragged down by the Federal Reserve's (Fed) dovish expectations, failed to attract buying in the short term, limiting further gains in USD/JPY. Investors also tended to wait and see, awaiting the Fed's policy updates on Wednesday and the Bank of Japan's policy updates on Thursday.
According to market research, Japan's service sector producer price index rose to 3.0% in September, higher than 2.7% in August, indicating high inflation, but the new prime minister's pro-stimulus policy has made the market skeptical about further policy tightening.
Growing expectations of a Fed rate cut also curbed the dollar's rebound, supporting the low-yielding yen and limiting the upside of USD/JPY.
Analysts pointed out: "The yen is under short-term pressure. Investors remain cautious before the key meetings of the Federal Reserve and the Bank of Japan. In the short term, attention should be paid to the resistance of $153.25 and the support of $152.65."
From a technical perspective, if USD/JPY breaks through the resistance level of $153.25–153.30, it will trigger a new round of long buying and may further rise to the $154.00 level, followed by targets of $154.75–154.80 and the psychological level of $155.00.
Support is concentrated at $152.65, the Asian session low. A break below this could lead to a slide towards $152.25 and $152.00. Further losses could trigger a test of the $151.10–$151.00 support zone. The overall daily chart is bullish, but key support and resistance levels remain a concern in the short term.
Editor's opinion:
The yen's short-term performance is influenced by expectations for Japan's fiscal policy and the easing of global trade tensions. Investors are cautiously watching ahead of key Federal Reserve and Bank of Japan meetings. Short-term resistance at $153.25 and support at $152.65 are key targets. Overall volatility is bullish, but caution is advised regarding the risk of a pullback if a breakout fails.
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