-0.56% for Dollar vs Yen as central banks shift reserves from US Treasuries

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Dollar vs yen drops 0.56% today

Highlights

US Treasury and European Commission discussions focused on Iran conflict economic measures and collaboration on critical mineral supply and Ukraine reconstruction.
Central banks are beginning to reduce US dollar allocations in reserves in favor of gold and alternative currencies, putting pressure on the dollar’s global role.
USD/JPY remains under short-term selling pressure near ¥158.27, with a likely sideways range of ¥158.00–¥159.60 as mixed technical signals dominate.

Reserve rotation and global policy talks amplify bearish dollar sentiment

Secretary of the Treasury Scott Bessent held talks with European Commissioner Valdis Dombrovskis regarding the Iran conflict, the United States' use of economic measures against Iran, fiscal and monetary policy perspectives, and collaboration on critical mineral supply chains and Ukraine's reconstruction. Barry Eichengreen reported that central banks have been shifting reserves away from US Treasuries into gold and other nontraditional reserve currencies, suggesting an initial move away from the US dollar’s global status. These developments occurred as price action has remained under broader selling pressure.

Mixed momentum as key resistance caps bullish follow-through

Technical signals for USD/JPY are mixed. The current price sits under the SMA-20 but above both the SMA-50 and SMA-200, highlighting short-term bearish pressure against a constructive medium- and long-term trend. Ichimoku Kijun on the daily chart at ¥159.22 marks near-term resistance, while momentum indicators diverge: the MACD stays strongly bullish, but a low ADX at 10.58 indicates weak trend strength. Oscillators including Stoch RSI (42.16) and CCI (–66.16) show emerging oversold conditions, D1 RSI is close to neutrality at 50, and BBP (0.07) together with AO in "Sell" mode reflect seller control as the pair trades at the day's lower end between ¥158.19 and ¥159.51.

Sideways bias favored with upside risk on bullish weekly signals

Looking ahead, USD/JPY is expected to fluctuate within a typical volatility band between ¥158.00 and ¥159.60 over the next five trading days. The sideways scenario is favored, with the probability of a move higher above ¥159.22 seen as elevated given three out of four W1 trend indicators remain bullish. A sustained break above this resistance could trigger an advance toward ¥159.60, while a move below ¥158.00 may result in further short-term losses if sellers persist.

Anton Kharitonov, expert at Traders Union, sees USD/JPY under short-term pressure despite strength on longer timeframes. He notes that renewed global reserve shifts and policy uncertainties continue to weigh on sentiment. The current range of ¥158.00 — ¥159.60 is expected to hold, with upside limited unless resistance at ¥159.22 breaks. "Unless we see a clear move above ¥159.22, I remain cautious and expect price action to stay defensive in the near term."

Earlier, analysts noted that despite periods of short-term weakness, the Dollar-Yen pair had maintained an overall bullish long-term structure. With new geopolitical tensions and shifting reserve trends adding uncertainty to the near-term outlook, traders should monitor for a potential breakout above ¥159.22 as a catalyst for renewed upward momentum.

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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