USD/JPY Defense at Four-Month-Low, Bounces Back to 150.00
USD/JPY Talking Points:
- USD/JPY was on the verge of a possible breakdown to start the week, with sellers showing resistance at 150.77 on Friday to keep the pair below the 150.00 handle.
- This week has been a trap for bears so far, however, as supports at 149.23 and 148.65 didn’t yield much ground to bearish breakdowns, and now the pair is bouncing back for another test of the 150.00 big figure.
It’s still not out of the woods yet, but so far USD/JPY has put in a sizable bounce from the support test at four-month-lows from Tuesday and Wednesday of this week. I had highlighted this price in the webinar on Tuesday, at 148.65 which was the spot that held the lows in USD/JPY in December. This presents a stark contrast to a week ago when USD/JPY was breaking below the 150.00 level for the first time in 2025 and threatening a larger round of carry unwind which could hit several macro markets. But, so far, this week has been a trap for bears as sellers were unable to break much fresh ground at those fresh four-month lows.
USD/JPY Daily Price Chart
USD/JPY Compared to USD
The U.S. Dollar is putting in a sizable bounce on the daily, currently trading above last Thursday’s high, but notably, USD/JPY is still well below its own high from last Thursday. This indicates additional JPY strength and that’s something that could make the USD/JPY pair attractive for bearish-USD scenarios.
Given tomorrow’s data release of Core PCE, there would be an open pathway for something like that to take place. If tomorrow’s inflation shows below expectations, that further highlights the growing differential between Japanese and U.S. inflation, which could lead to a continued shift in rates with lower US rates and higher Japanese rates. This could, of course, further pressure carry unwind themes in the pair.
At this point, support is pretty clearly defined at 148.65. Below that, there’s a Fibonacci level at 148.13 and then a confluent zone around the 147-handle, specifically 146.95-147.18.
For resistance, 150 is already in-play but above that, the Fibonacci level at 150.77 was in-play last Friday to help hold the highs, with 151.51 and 151.95 above that.
USD/JPY Four-Hour Chart
--- written by James Stanley, Senior Strategist
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
City Index is a trading name of StoneX Financial Pty Ltd.
The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.
While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.
StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.
It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.
StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.
© City Index 2025