Selling pressure pushes dollar vs yen lower in today trading

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Us dollar vs yen slides 0.61% today

Highlights

Japan's $1.4 trillion foreign currency reserves face heightened scrutiny after Prime Minister Sanae Takaichi's election win, as they may help address a 5 trillion yen annual revenue gap.
Markets are concerned about Japan's ability to balance fiscal policy with possible future interventions to manage the dollar-yen exchange rate.
USD/JPY shows a bullish long-term structure above the MA-200 at ¥152.44, with immediate resistance near ¥157.00 and dynamic support at ¥155.76.

Fiscal resource speculation rises amid Takaichi’s post-election outlook

Japan's $1.4 trillion in foreign currency reserves have drawn increased scrutiny following Prime Minister Sanae Takaichi's election win, as they may be considered for covering an expected 5 trillion yen annual revenue shortfall. The reserves, largely invested in U.S. Treasuries and funded with yen-denominated bills, serve as a potential resource for interventions in the yen market. Market concerns are focused on how Japan will balance fiscal policy with the need for future actions on the dollar vs yen exchange rate.

Anton Kharitonov, expert at Traders Union, sees persistent uncertainty in USD/JPY despite technical support. He warns that mixed momentum and overbought signals create downside risk. Japan's potential use of reserves raises fresh concerns about longer-term fiscal headwinds. Kharitonov notes that short-term seller momentum could accelerate if ¥155.76 fails. "I remain cautious, as the underlying technical and macro signals do not support chasing dollar strength at these levels."

Viktoras Karapetjanc, expert at Traders Union, believes the bullish structure in USD/JPY remains intact. He points to Japan’s massive currency reserves and consistent investor confidence as supporting further upside. The weekly chart offers several strong technical signals aligning with positive sentiment. Karapetjanc expects the market to deliver new opportunities if resistance at ¥157.00 is cleared. "I see further growth ahead, and the market offers multiple setups for bullish traders this week."

Jainam Mehta, market strategist, takes a scenario-based approach to USD/JPY. The analyst sees a possible breakout above ¥157.00 if bullish momentum persists, but highlights that overbought signals warrant caution. Intraday exhaustion suggests tactical pullback trades may emerge. "A consolidation phase could present contrarian entries if the pair dips toward dynamic support."

Mixed momentum and overbought signals as intraday sellers emerge

Dynamic support is indicated by Ichimoku Kijun at ¥155.76, while immediate resistance is near the MA-50 or the next round level at ¥157.00. Momentum signals are mixed — D1 MACD and ADX both show neutral trends with weak directional strength, while RSI and CCI indicate buyers maintain the upper hand. Stoch RSI and BBP on the daily frame highlight overbought conditions and possible buyer exhaustion, and intraday BBP shows sellers controlling short-term moves. The Awesome Oscillator on D1 reinforces the bullish trend, but most short-term signals on lower timeframes favor selling pressure, reflecting market indecision.

Last time, analysts noted that USD/JPY trades above its key moving averages, signaling short-term bullish momentum amid price action strength, while currently hovering near resistance around ¥157. Despite buyers dominating intraday, momentum indicators such as MACD, ADX, and oscillators remain mixed or neutral, reflecting underlying market indecision.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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