The Japanese yen has continued to hover in a weak range lately, with the USD/JPY exchange rate recently dipping to a two-week low. Market watchers are paying close attention to whether this signals sustained strength in the US dollar and if there’s still room for the yen to bounce back.
Looking at performance so far this year, the yen has averaged around 148.94 against the dollar. It peaked at 158.35 in early January, but saw a significant correction in April, dropping to 140.72. Since early June, the pair has traded in a narrower range, closing at 144.97 on June 10 — a level that continues to draw focus.
From a technical standpoint, the yen appears to be finding support around 144.35. If this level holds, a short-term technical rebound may be possible. On the other hand, if it breaks below 143.65, it could trigger broader selling pressure, opening the door for a further slide toward 141.65. Conversely, if resistance at 145.65 is cleared and sustained, there’s potential for a recovery toward the next key level at 147.45.
What’s been keeping the dollar strong? Solid economic data from the US, especially a cooling in rate cut expectations from the Fed. Inflation has been more persistent than expected, and a resilient labor market has helped keep the dollar appealing—even without a noticeable rise in risk-off sentiment.
As for the yen, its traditional role as a safe haven asset has lost some shine lately. As investor appetite for risk improves, capital tends to shift away from low-yielding assets like the yen and into relatively higher-return dollar investments.
Looking ahead to late June, markets are bracing for key US economic reports and potential signals from the Bank of Japan. A continuation of strong US data would likely reinforce dollar strength. However, any shift in policy tone from the BoJ—especially hints at tightening—could lend short-term support to the yen.
For now, the yen remains under pressure. Investors would be wise to keep a close eye on dollar momentum and policy cues from major central banks. In an environment clouded by macro uncertainty, maintaining flexibility and a strong focus on risk management remains paramount.
