The USD/JPY currency pair experienced significant volatility on Wednesday, initially falling sharply amid another suspected intervention by Japanese authorities before staging a modest rebound. At the time of reporting, USD/JPY was trading around 156.42, having recovered from an intraday low near 155.00, but remained down nearly 0.90% on the day [1].
The US Dollar's weakness was further exacerbated by hopes of a potential US-Iran deal, following an Axios report suggesting that Washington and Tehran are moving closer to an agreement aimed at ending the war and establishing a framework for detailed nuclear negotiations. However, uncertainty about whether both sides can reach a final agreement has limited deeper losses in the Greenback [1]. The US Dollar Index (DXY) was trading around 98.04 after touching an intraday low of 97.62, down roughly 0.45% on the day [1].
Despite repeated warnings from Japanese authorities, Tokyo has not officially confirmed any intervention, keeping traders cautious about further action. The Japanese Yen has struggled to gain meaningful traction, as ongoing oil supply disruptions in the Middle East continue to weigh on sentiment, given Japan’s heavy dependence on imported energy, much of which passes through the Strait of Hormuz [1].
Looking ahead, market participants are closely monitoring developments in the US-Iran negotiations, especially any progress toward reopening the Strait of Hormuz. Additionally, attention is turning to upcoming Japanese economic data, including Labor Cash Earnings and the Bank of Japan’s Monetary Policy Meeting Minutes due on Thursday, as well as US economic releases such as weekly Initial Jobless Claims and the Nonfarm Payrolls (NFP) report on Friday [1].
From a technical perspective, USD/JPY maintains a bearish near-term tone, trading below the 100-day Simple Moving Average (SMA) at 157.36 and the 50-day SMA at 158.69, with support at the 200-day SMA at 154.24. The Relative Strength Index (RSI) near 38 and a negative MACD indicate building downside momentum, while the ADX around 23 suggests only moderate trend strength [1].
CONCLUSION
USD/JPY remains under pressure due to suspected Japanese intervention and renewed hopes for a US-Iran deal, with the US Dollar broadly weaker. Market participants are watching for further developments in US-Iran negotiations and upcoming economic data from both Japan and the US. Technical indicators point to a bearish outlook for the pair in the near term.