Japanese Yen Stays Under Pressure Near One-Month Low as USD/JPY Eyes Key US Data

The Japanese Yen (JPY) continues to trade weak in Wednesday’s Asian session, holding near a one-month low against the US Dollar (USD). The USD/JPY pair is hovering close to the 149.00 mark, supported by a firmer Dollar recovery and ongoing domestic political uncertainty in Japan.

Political Instability Weighs on the Yen

The Japanese currency is facing pressure as political tensions cloud the domestic landscape. Reports suggest the ruling Liberal Democratic Party (LDP) is preparing for leadership challenges, adding to uncertainty. At the same time, Bank of Japan (BoJ) Deputy Governor Ryozo Himino’s cautious remarks this week have dampened market hopes for an aggressive rate hike, allowing speculators to maintain short positions on the Yen.

Divergent Fed–BoJ Outlook Creates Volatility

Market participants remain convinced that the BoJ will eventually raise rates before year-end, driven by strong wage growth and persistent inflationary pressures. However, in contrast, traders are now betting on a 90% probability of a Federal Reserve rate cut in September, according to CME’s FedWatch tool. This divergence in monetary outlooks is a key driver of volatility in USD/JPY.

US Dollar Strength Supports Upside

The US Dollar has regained traction for the second day, aided by safe-haven flows amid global geopolitical risks. Recent attacks in Eastern Europe and ongoing trade tensions have fueled demand for the Greenback. This rebound has kept USD/JPY supported, with technical charts showing a possible breakout above the 200-day Simple Moving Average (SMA) near 149.00.

Key Events Ahead

Investors are shifting their focus to upcoming US economic releases. Today’s JOLTS Job Openings data will provide an early look at labor market strength, while ADP Employment and ISM Services PMI are due later this week. The main spotlight remains on Friday’s Nonfarm Payrolls (NFP) report, which could set the tone for Fed policy in the weeks ahead.

USD/JPY Technical Levels to Watch

• Immediate Resistance: 149.00 (200-day SMA)
• Upside Targets: 149.55–149.60 zone, then the psychological 150.00 mark.
• Immediate Support: 148.25–148.30 region, followed by 148.00 and 147.40.
• Deeper Downside: Break below 146.70 could expose the August swing low at 146.20.

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📌 Summary: The Japanese Yen remains fragile near a one-month low as political uncertainty and cautious BoJ commentary weigh on sentiment. Meanwhile, the US Dollar’s rebound and anticipation of key US data releases keep USD/JPY volatile. A decisive break above 149.00 could open the door toward the 150.00 level, while a failure may see the pair retreat back toward 147.00.

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