Japanese Yen Strengthens to 2-Week Highs Amid BoJ Rate Bets and Risk Aversion

📉 USD/JPY Slides as Yen Gains on Strong Data and Safe-Haven Demand

The Japanese Yen (JPY) gained notable ground on Thursday, pushing USD/JPY toward 143.00, its lowest level in two weeks. The move was driven by a mix of upbeat Japanese economic data, renewed speculation of Bank of Japan (BoJ) rate hikes, and mounting global geopolitical concerns, which lifted safe-haven demand.

The decline in the US Dollar (USD) was further amplified by Moody’s downgrade of the U.S. credit rating, weakening investor sentiment and triggering a broad sell-off in USD pairs.

🔺 BoJ Hike Bets Boost JPY as Machinery Orders Surprise to the Upside

Japan’s Core Machinery Orders surged 13.0% YoY in March, defying expectations of a 1.6% decline. This marks the strongest reading in nearly 20 years and signals a healthy rebound in corporate investment — easing recession concerns and supporting the case for further BoJ rate hikes in 2025.

Market expectations for Japan’s policy tightening were already growing amid signs of persistent inflation and rising wages. The BoJ has hinted that improving domestic conditions may allow a gradual exit from ultra-loose monetary policy, which continues to support the Yen.

🛡️ Global Risk-Off Mood Adds to JPY Strength

Risk sentiment turned sour following headlines from both the U.S. and global political stage:

Trump’s proposed tax plan threatens to add $3–5 trillion to U.S. debt over the next decade
US-China tensions escalated after Washington issued warnings over Huawei’s AI chips, prompting accusations of “unilateral protectionism” from Beijing
Geopolitical flashpoints — including the ongoing conflict in Gaza and reports of Putin’s refusal to de-escalate in Ukraine — further boosted demand for safe-haven assets like the JPY

Additionally, Fed officials voiced growing concern over weakening consumer and corporate sentiment, citing uncertainty surrounding trade and fiscal policies.

📊 USD/JPY Technical Outlook: Momentum Shifts Bearish

Price Level: 143.00 (2-week low)

Key Technical Zones:

Type	Level
Resistance	144.40 → 145.00 → 145.40
Immediate Support	143.20 → 143.00
Breakdown Target	142.40 → 142.00

A break below the 61.8% Fibonacci retracement (143.20) would signal deeper downside
Immediate support lies at the 142.40–142.00 zone
RSI on the 4-hour chart approaches oversold territory, suggesting possible short-term consolidation

Unless buyers reclaim the 144.40–145.00 region, the bias remains tilted to the downside. A break below 143.00 could trigger technical selling and drive the pair toward the next major support at 142.00.

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Yasher Rizwan