Dollar-yen struggles as the BoJ signals further tightening

USDJPY reached a two-month low on 6 February as senior members of the BoJ and the Japanese government commented that inflation is likely to continue rising in the country. Growth in average Japanese earnings remained relatively strong. The BoJ’s next meeting is still more than a month away but, for now, a hike then seems questionable. Japan hasn’t been significantly affected by new American tariffs as yet and this factor doesn’t seem likely to become more important for the yen’s performance soon.

The price has broken through support around the 23.6% weekly Fibonacci retracement near ¥153 and is starting to show signs of oversold. ¥150 would be an obvious target for sellers since this was a reference from late November to early December 2024. However, whether that could be tested soon depends greatly on the results from 7 February’s job report.

If there’s a bounce, the initial area of focus might be ¥154 near the 100 SMA. As of now, the yen seems to have more appeal than the dollar as a haven, but political news could change that in the next few days.

This is my personal opinion, not the opinion of Exness. This is not a recommendation to trade.