US Dollar vs Yen adds 0.50% as global central banks sell US Treasuries

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US Dollar vs Yen up 0.50% today

Highlights

Global central banks sold over $90 billion in US Treasuries after the US-Iran conflict, pushing holdings to a 12-year low.
Despite broad selling, January saw a net purchase surge of $50.6 billion in US Treasuries, the largest monthly inflow since 2011.
USD/JPY maintains a bullish structure, consolidating between ¥158.50 and ¥161.40, with technical indicators signaling strong upside momentum ahead.

Central bank Treasury sales accelerate amid FX and budget strains

Since the outbreak of the US-Iran conflict, global central banks—including those from Turkey, Thailand, and India—have sold over $90 billion worth of US Treasuries across five consecutive weeks, bringing holdings to their lowest level since 2012, as countries move to manage pressures from foreign exchange intervention, energy imports, and defense spending. Data updated through March show that, despite this overall selling trend, foreign central banks recorded a net purchase of $50.6 billion in US Treasuries in January, marking their largest monthly purchase in 13 years. The majority of foreign central bank Treasury holdings are maintained in custody at the New York Federal Reserve, which recently reached a 16-year low below $3 trillion.

Volatility and mixed momentum as oscillators diverge

Momentum indicators show mixed signals for USD/JPY: the MACD points to strong bullish momentum, but the ADX reflects a weak or unclear trend. The RSI stands neutral to bearish at 48.8, with both Stoch RSI and CCI in oversold territory, while BBP also signals seller dominance in the near term. Despite a gap higher at the open and current prices near the session's upper range highlighting strength and volatility, divergent signals among oscillators underline uncertainty in the uptrend.

Consolidation outlook as technical signals favor further gains

For the short term, typical volatility for USD/JPY is likely to keep the pair within the ¥158.50 – ¥161.40 band. With three out of four weekly momentum signals (RSI, MACD, SMA-50) showing a greater than 80% probability of continued upside, the core scenario is for consolidation inside this range. A decisive push above ¥161.40 opens the path for a further bullish extension, while a move below immediate support near ¥158.90 could trigger a deeper retracement.

Anton Kharitonov, expert at Traders Union, notes that USD/JPY holds a strong technical position above all key moving averages but faces near-term uncertainty due to mixed momentum signals. He sees that recent wholesale selling of US Treasuries by global central banks adds a layer of macro risk, despite resilient longer-term demand. Kharitonov remains cautious and expects volatility to keep the pair within the ¥158.50 – ¥161.40 range for now. "Until there is a clear breakout above ¥161.40 or a sustained move below ¥158.90, I prefer a defensive approach and avoid aggressive positioning."

Earlier, analysts noted that despite mixed technical indicators and short-term volatility, USD/JPY maintained an overall bullish medium- and long-term outlook. The latest developments reinforce this positive trend, but traders should watch for potential breakout opportunities above ¥161.40 or downside risks if support near ¥158.90 fails to hold.

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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