Japanese Yen Analysis & Setups: USD/JPY, EUR/JPY, GBP/JPY

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JAPANESE YEN FORECAST – USD/JPY, EUR/JPY, GBP/JPY

  • The Japanese yen rallies following verbal intervention by Japan’s top FX diplomat
  • However, a sustained recovery is unlikely to materialize until the Bank of Japan abandons its ultra-dovish stance
  • This article discusses the technical outlook for USD/JPY, EUR/JPY and GBP/JPY

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The Japanese yen strengthened on Thursday following remarks by Japan’s vice finance minister for international affairs, Masato Kanda, indicating that the government is monitoring exchange rate fluctuations with urgency and is prepared to respond appropriately to suppress volatility.

The verbal intervention by the country’s chief foreign exchange diplomat suggests that Tokyo is uncomfortable with the yen’s extreme weakness and may be considering intervening to shore up the domestic currency, which has depreciated more than 6% against its major peers this year.

Although Japanese authorities may take comfort in today’s temporary relief, a sustained yen recovery is improbable until later this year, when the Bank of Japan abandons negative rates. Though the timeline remains fluid, April could mark the moment when the BoJ finally pulls the trigger.

Shifting focus from fundamental analysis, the next section of this piece will concentrate on evaluating the technical outlook for USD/JPY, EUR/JPY and GBP/JPY, dissecting critical levels that traders may observe as potential support or resistance in the coming days.

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USD/JPY FORECAST – TECHNICAL ANALYSIS

USD/JPY fell on Thursday, briefly breaching technical support at 149.70. If this breakdown is confirmed on daily closing prices, sellers may gather impetus to instigate a push towards 148.90. Further losses below this area could precipitate a drop towards 147.50, slightly above the 100-day SMA.

Conversely, if bulls reestablish firm dominance and catalyze a meaningful rebound, resistance emerges at 150.85. It’s imperative for traders to closely watch this ceiling, as a breakout has the potential to reignite bullish momentum, setting the stage for a rally towards the 152.00 handle.

USD/JPY TECHNICAL CHART

A screen shot of a graph  Description automatically generated

USD/JPY Chart Created Using TradingView

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of clients are net long.




of clients are net short.

Change in Longs Shorts OI
Daily -12% -8% -9%
Weekly 13% -6% -3%

EUR/JPY FORECAST – TECHNICAL ANALYSIS

EUR/JPY sank on Thursday but managed to hold above support at 161.50. Bulls must staunchly defend this floor; failure to do so could seriously damage sentiment and spark a deeper retracement towards 160.40. On further weakness, all eyes will be on the 50-day simple moving average near 159.85.

On the flip side, if prices stabilize around current levels and take a turn to the upside, overhead resistance awaits around the psychological 164.00 threshold. Overcoming this technical barrier could see the pair extend gains towards 165.50 in short order.

EUR/JPY TECHNICAL CHART

A screen shot of a graph  Description automatically generated

EUR/JPY Chart Created Using TradingView

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GBP/JPY FORECAST – TECHNICAL ANALYSIS

GBP/JPY extended losses on Thursday, slipping beneath trendline support at 190.20 and moving closer to another crucial floor at 188.50. Bulls must hold the line at 188.50 to thwart bearish momentum; any failure to uphold this floor increases the risk of a deeper slump toward the 50-day SMA at 186.35.

On the other hand, if the pair mounts a rebound, resistance appears at 190.20, followed by 191.30, the multi-year peak established earlier this week. Clearing this obstacle might pose a challenge for the bulls based on recent price action, but a successful breakout could fuel a jump toward the 193.00 mark.

GBP/JPY TECHNICAL CHART

A screen shot of a graph  Description automatically generated

GBP/JPY Chart Created Using TradingView



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