The USD/JPY currency pair remains close to its 40-year peak, with recent trading showing the pair holding above strong support at 161.10 and consolidating around 161.78 [1][2]. United Overseas Bank analysts Quek Ser Leang and Lee Sue Ann maintain a constructive outlook, expecting the pair to test the 2024 high of 162.00 over a 1–3 week horizon, provided the 161.10 support is not breached [1]. Intraday, the pair has been confined to a tight range between 161.45 and 161.95, with little significant movement observed in the latest sessions [1].
On Friday, USD/JPY retreated slightly from the 162.00 neighborhood, hitting a daily low in the mid-161.00s during the first half of the European session [2]. This pullback was attributed to a combination of factors: the US Dollar faced selling pressure for the second consecutive day amid receding expectations for further US Federal Reserve rate hikes, while the Japanese Yen found support from speculation about possible intervention by Japanese authorities and hawkish Bank of Japan expectations [2]. These dynamics prompted some profit-taking and a reduction in bullish bets on the pair [2].
Despite the pullback, the downside for USD/JPY appears limited. The wide US-Japan interest rate differential continues to cap any meaningful appreciation of the Yen, and prospects for at least one more Fed rate hike this year help limit USD losses [2]. Technical indicators show that the Relative Strength Index (RSI) has cooled to neutral and the MACD has slipped slightly below zero, suggesting waning upside momentum but not a full reversal [2]. The pair remains comfortably above the 100-period Simple Moving Average (SMA) on the 4-hour chart, keeping the broader uptrend intact [2]. Key support levels are identified at 161.63 and 160.74, where buyers are expected to re-emerge if deeper dips occur [2].
Geopolitical risks also played a role in market sentiment, as traders priced in a risk premium following reports of an attack by Iran’s Islamic Revolutionary Guard Corps on a Singapore-flagged cargo ship in the Strait of Hormuz [2]. Meanwhile, the Japanese Yen was the strongest against the Australian Dollar among major currencies today, but weakened by 0.13% against the US Dollar [2].
No forward-looking analyst opinions beyond the expectation of a continued bullish structure and potential for renewed gains once momentum stabilizes were provided [1][2].
CONCLUSION
USD/JPY remains near multi-decade highs, with analysts maintaining a bullish outlook as long as key support levels hold. While short-term momentum has cooled and profit-taking has emerged, the broader uptrend remains intact, supported by interest rate differentials and geopolitical risks. Market participants are watching for a potential retest of the 162.00 level in the coming weeks.