The US dollar strengthened, and the USD/JPY pair rose to around 159.80, hitting a two-week high.
2026-04-24 13:34:00
The USD/JPY pair continued its upward trend in Asian trading on Friday, trading around 159.80, hitting a near two-week high. The exchange rate has risen for five consecutive trading days and is on track for a significant weekly gain, indicating an overall bullish market structure.
The core driver of the yen's appreciation stems from the uncertainty surrounding the Middle East. The escalating conflict over the Strait of Hormuz is increasing shipping safety risks and disrupting global energy supplies. As a major energy importer, Japan is highly dependent on this passage; any restrictions on its energy supply will directly impact its economy, thus weighing on the yen's performance.
Meanwhile, the US dollar continued to strengthen, supported by safe-haven demand and policy expectations. Market confidence in a long-term agreement between the US and Iran remained weak, and the continued US maritime restrictions on Iran exacerbated geopolitical risks. Against this backdrop, the US dollar, as a safe-haven asset, attracted inflows, providing upward momentum for the USD/JPY exchange rate.
From a domestic perspective in Japan, although inflation has rebounded somewhat, it is still insufficient to prompt a policy shift. Data shows that Japan's CPI rose to 1.5% year-on-year in March, and core CPI rose to 1.8%, still below the Bank of Japan's 2% target level. However, the core CPI, excluding energy factors, rose to 2.4%, indicating that price pressures have some stickiness, which theoretically supports the possibility of future policy adjustments.
However, the market widely expects the Bank of Japan to maintain its interest rate unchanged in the short term, and this policy expectation continues to suppress the yen. In contrast, the US economy is performing steadily, and market expectations for a Federal Reserve rate cut have cooled, allowing the dollar to maintain its interest rate advantage. This policy divergence has become an important factor driving the rise of USD/JPY.
However, it should be noted that expectations of potential intervention by Japanese authorities in the foreign exchange market are rising. As the exchange rate approaches the 160 mark, market vigilance regarding official intervention to stabilize the exchange rate has increased, which to some extent limits the potential for further appreciation.
From a technical perspective, on the daily chart, USD/JPY remains in a high-level range, with an overall bullish structure, but has not yet effectively broken through the upper edge of the previous consolidation range. The key resistance level is currently at the psychological level of 160.00; a break above this level would open up further upside potential. Support lies at 158.50, a short-term moving average support area. Momentum indicators show that bullish forces still dominate, but are approaching overbought territory. On the 4-hour chart, the exchange rate maintains an ascending channel structure, with short-term support around 159.00. A break below this level could lead to a retest of the 158.00 area; if it continues to stabilize, there is still a possibility of testing the 160 level.
Editor's Summary <br/>Overall, the current USD/JPY exchange rate movement is driven by a combination of geopolitical risks, energy prices, and monetary policy differences. The situation in the Middle East poses a potential shock to the Japanese economy, exacerbating downward pressure on the yen, while the US dollar remains strong due to safe-haven demand and interest rate advantages. However, as the exchange rate approaches a key psychological level, rising expectations of intervention by Japanese authorities may constrain short-term movements. The future direction of the exchange rate will depend on developments in the geopolitical situation and changes in policy signals; market volatility is expected to continue to rise.
The core driver of the yen's appreciation stems from the uncertainty surrounding the Middle East. The escalating conflict over the Strait of Hormuz is increasing shipping safety risks and disrupting global energy supplies. As a major energy importer, Japan is highly dependent on this passage; any restrictions on its energy supply will directly impact its economy, thus weighing on the yen's performance.
Meanwhile, the US dollar continued to strengthen, supported by safe-haven demand and policy expectations. Market confidence in a long-term agreement between the US and Iran remained weak, and the continued US maritime restrictions on Iran exacerbated geopolitical risks. Against this backdrop, the US dollar, as a safe-haven asset, attracted inflows, providing upward momentum for the USD/JPY exchange rate.
From a domestic perspective in Japan, although inflation has rebounded somewhat, it is still insufficient to prompt a policy shift. Data shows that Japan's CPI rose to 1.5% year-on-year in March, and core CPI rose to 1.8%, still below the Bank of Japan's 2% target level. However, the core CPI, excluding energy factors, rose to 2.4%, indicating that price pressures have some stickiness, which theoretically supports the possibility of future policy adjustments.
However, the market widely expects the Bank of Japan to maintain its interest rate unchanged in the short term, and this policy expectation continues to suppress the yen. In contrast, the US economy is performing steadily, and market expectations for a Federal Reserve rate cut have cooled, allowing the dollar to maintain its interest rate advantage. This policy divergence has become an important factor driving the rise of USD/JPY.
However, it should be noted that expectations of potential intervention by Japanese authorities in the foreign exchange market are rising. As the exchange rate approaches the 160 mark, market vigilance regarding official intervention to stabilize the exchange rate has increased, which to some extent limits the potential for further appreciation.
From a technical perspective, on the daily chart, USD/JPY remains in a high-level range, with an overall bullish structure, but has not yet effectively broken through the upper edge of the previous consolidation range. The key resistance level is currently at the psychological level of 160.00; a break above this level would open up further upside potential. Support lies at 158.50, a short-term moving average support area. Momentum indicators show that bullish forces still dominate, but are approaching overbought territory. On the 4-hour chart, the exchange rate maintains an ascending channel structure, with short-term support around 159.00. A break below this level could lead to a retest of the 158.00 area; if it continues to stabilize, there is still a possibility of testing the 160 level.
Editor's Summary <br/>Overall, the current USD/JPY exchange rate movement is driven by a combination of geopolitical risks, energy prices, and monetary policy differences. The situation in the Middle East poses a potential shock to the Japanese economy, exacerbating downward pressure on the yen, while the US dollar remains strong due to safe-haven demand and interest rate advantages. However, as the exchange rate approaches a key psychological level, rising expectations of intervention by Japanese authorities may constrain short-term movements. The future direction of the exchange rate will depend on developments in the geopolitical situation and changes in policy signals; market volatility is expected to continue to rise.
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