The USD/JPY currency pair continued its decline for a second consecutive day, losing 0.40% and finding support around the 153.00 level, with the session expected to close near 153.75 [1]. Since September 2, USD/JPY has fallen over 4%, equivalent to a 650-pip drop, and briefly touched a nearly seven-month low of 152.89 before rebounding to the 153.70 area, forming a hammer candlestick pattern on the daily chart—a formation typically considered bullish [1]. However, a daily close above the high of the day at 154.42 is required to confirm a potential rebound, with subsequent resistance levels at 155.00, the 200-day Simple Moving Average at 158.45, and then 160.00 [1].
Technical indicators show the Relative Strength Index (RSI) is in oversold territory, suggesting the possibility of further downside, but a move above the 30 level could signal a recovery in the pair [1]. If bearish momentum resumes and the 153.00 support is breached, the next target would be the yearly low of 152.10, last seen on January 27 [1].
The article also highlights that the Japanese Yen's value is influenced by the Bank of Japan's monetary policy, the yield differential between Japanese and US bonds, and overall market risk sentiment [1]. The Bank of Japan's gradual unwinding of its ultra-loose monetary policy in 2024 has provided some support to the Yen, while narrowing yield differentials due to policy changes in both Japan and other major economies are also impacting the currency pair [1].
No specific market reactions or analyst opinions are provided in the article, but the technical outlook suggests traders are watching for confirmation of a rebound or further downside depending on key support and resistance levels [1].
CONCLUSION
USD/JPY has experienced a significant decline but is showing signs of technical support near 153.00. The market is closely monitoring whether the pair can confirm a rebound or continue its downward trend, with key levels and central bank policies remaining in focus.