Over the past 24 to 48 hours, the USD/JPY pair demonstrated relative strength, trading between 159.0 and 162.5, closing yesterday at 159.028 slightly below the previous day’s close of 159.2. Market volatility during this period was largely influenced by renewed concerns over US policy intervention and fears surrounding dollar debasement.

Recent reports highlighted that US Treasury Secretary Scott Bessent announced a large-scale bond buyback plan to curb soaring Treasury yields. This move has fueled short-term concerns over the dollar’s potential depreciation, but the bond buyback also supports the dollar, which in turn encouraged dip-buying in USD/JPY, creating a mixed market sentiment. Moreover, as the GBP/USD rally weakened, capital flowed into dollar-linked pairs such as USD/JPY and USD/CHF, adding upside momentum to these currencies.

For the average investor, this period reflects a currency struggling amid policy uncertainties and risk-off sentiment, as the market cautiously weighs how US debt management strategies might impact the dollar’s longer-term value. If holding USD/JPY positions, investors should closely watch forthcoming US inflation data and Bank of Japan policy signals, as these could provoke significant price swings. The subtle shifts in global economic and monetary policies remain the key drivers of USD/JPY’s near-term trend.

Daily Chart

The daily chart shows USDJPY on a steady rebound from recent lows near 157 towards the 162 resistance zone. The price remains above the 200-day moving average at 158.34, indicating an overall bullish medium-term trend. Having broken above the 9-day EMA, momentum is gaining strength, but the major resistance at 162.84 remains a critical barrier. Bollinger Bands have tightened, signaling an imminent expansion phase. The MACD histogram is contracting but still above zero, suggesting bullish momentum is intact but cautious.

1H Chart

On the hourly timeframe, USDJPY has moved gradually higher within a 159 to 162 range over the last 3-5 days. The 20 and 50-period moving averages form a bullish alignment, underpinning short-term support. MACD is converging towards a potential bullish crossover, signaling increased upside momentum. The middle Bollinger Band acts as key support, and a recent bullish engulfing candlestick pattern points to upward continuation within the next 24 hours.

Technical Trend:  USDJPY currently shows a cautiously bullish short-term trend with a tempered upward bias.

USDJPY exhibits multiple technical bullish signals including a daily close above the 9-day EMA and 200-day SMA, suggesting trend reversal potential. The hourly chart’s soon-to-be MACD golden cross combined with Bollinger Band support reinforces short-term momentum. Dollar debasement concerns are causing increased volatility, indicating uncertain conditions ahead. Traders need heightened vigilance around economic data releases and key technical levels to capitalize on potential high-probability trading setups.

Today’s economic calendar in GMT+1 features key US data releases at 14:30, including July’s Personal Consumption Expenditures (PCE) and core inflation figures, crucial for USDJPY sensitivity. If US inflation data comes in weaker than expected, it could pressure the USD, negatively impacting USDJPY prices. Other global data, like Australia’s CPI earlier in the day, has less direct impact on USDJPY. Traders should closely monitor the afternoon US releases to adjust strategies accordingly.

Resistance & Support

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