The Japanese yen rebounded modestly on Wednesday, recovering from its weekly low against the US dollar. This pulled the USD/JPY exchange rate below the key 144.00 level ahead of the European trading session.
Japan’s services sector activity received an upward revision, adding to hopes that inflation may rise due to increasing wages. These developments support the possibility of future rate hikes from the Bank of Japan (BoJ). At the same time, ongoing geopolitical tensions and global trade uncertainty continue to lend support to the yen, a traditional safe-haven currency.
Mixed Signals from BoJ Limit Yen’s Upside
Despite the supportive data, cautious remarks from BoJ Governor Kazuo Ueda on Tuesday signaled that a rate hike may not be imminent. Ueda’s comments fueled speculation that the central bank will proceed carefully with policy tightening.
Additionally, discussions about reducing bond purchases after 2026 and a broadly optimistic global market sentiment have discouraged traders from placing strong bullish bets on the yen. As a result, downside pressure on the USD/JPY pair may remain limited for now.
Investors are now turning their attention to upcoming US macroeconomic data and speeches from key Federal Open Market Committee (FOMC) members, which could influence short-term trading strategies.
Technical Analysis: USD/JPY Looks for Breakout Confirmation Above 144.30
USD/JPY recently broke above the 200-period Simple Moving Average (SMA) on the 4-hour chart, which is often seen as a bullish signal. Technical indicators on the daily chart are also improving, suggesting upward momentum may continue.
However, the pair has so far failed to break decisively above the Asian session high near 144.30. Analysts suggest that traders should wait for a clear move above this level before positioning for more gains. If confirmed, USD/JPY could aim for the psychologically important 145.00 level, with intermediate resistance expected around 144.75 to 144.80.
Key Support Levels to Watch
On the downside, immediate support is seen in the 143.50–143.45 zone. If this level is breached, USD/JPY may drop to the 143.00 mark. Continued selling could push the pair further down to the 142.40–142.35 region, which marks the weekly low set on Tuesday, and then to the 142.10 level—last week’s monthly swing low.
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