Yen Swings—USD/JPY Chasing 154?
The Japanese yen (JPY) came under selling pressure again in the Asian session after Friday's data showed Tokyo consumer inflation fell sharply to a nearly four-year low in January. This led the market to believe the Bank of Japan (BoJ) would be in no rush to raise interest rates. Furthermore, concerns about Japan's financial condition amid Prime Minister Sanae Takaichi's reflationary policies and political uncertainty ahead of the February 8th snap elections also weakened the yen.
The combination of a weakening yen and a moderately stronger US dollar (USD) pushed USD/JPY closer to 154.00 and the key resistance area at the 100-day moving average (SMA). However, the upside is not entirely clear, as the market remains wary of the possibility of coordinated US-Japan intervention to strengthen the yen. Expectations of such intervention typically make traders hesitant to aggressively position themselves against a weaker yen.
On the other hand, uncertainty about the tariff war triggered by US President Donald Trump's tariff threats, along with geopolitical risks, have kept market sentiment cautious. This condition could restrain the yen's weakening, as it remains considered a safe-haven asset during risk-off periods. Meanwhile, the dollar could also be held back by speculation of further interest rate cuts by the Fed and concerns about the central bank's independence, which could limit USD/JPY gains. (az)
Source: Newsmaker.id
