The Japanese Yen has continued its downtrend against the US Dollar, with the USD/JPY pair breaking out of a brief consolidation and now challenging its 2024 peak near the 162.00 level, according to Societe Generale’s Kenneth Broux [1]. The bank identifies key technical levels at 159.65, 160.40, and 162.40, with upside projections extending to 163.70 and 164.40 if the pair breaks above the current resistance at 162.40 [1].
The spot rate is currently trading just below the 162-handle. Notably, May retail sales in Japan surprised to the upside, rising 1.9% month-on-month compared to a consensus expectation of a 0.5% decline. This robust data point adds to the case for further tightening by the Bank of Japan, according to Societe Generale [1]. Despite the strong retail sales, there are no clear signals of a large pullback in USD/JPY at this stage, and the defense of the recent pivot low at 159.65 could support a continuation of the uptrend [1].
Market participants are closely watching the 162.40 resistance level, as a break above this could open the door to further gains toward 163.70 and 164.40. Support is seen at 160.40, providing a potential floor for the pair in the near term [1].
CONCLUSION
The Japanese Yen remains under pressure as USD/JPY tests its 2024 highs, driven by strong retail sales data and expectations of further Bank of Japan tightening. Technical levels suggest the potential for additional upside if resistance is breached, signaling continued market focus on the Yen's weakness and policy outlook.