On Thursday (February 13th), the US dollar/Japanese yen (USD/JPY) traded at 153.867, down 0.34% for the day. Although the US dollar has experienced a slight correction in the short term, market sentiment still leans towards its strength. Recently, the US economic data, especially the Core Consumer Price Index (CPI), has risen beyond expectations, and the market's expectations for the continuation of the Federal Reserve's interest rate hike cycle have become increasingly strong, providing support for the US dollar. At the same time, the monetary policy of the Bank of Japan remains loose, and the yen is facing significant depreciation pressure.

market analysis

The recent trend of the US dollar against the Japanese yen has shown a clear oscillating upward trend, especially after breaking through the 200 day moving average (EMA), the upward movement of the US dollar has been strengthened. Yesterday's trading day, the US dollar hit the 50 day moving average against the Japanese yen and briefly encountered resistance, but still remained within a relatively high range. Market analysts generally believe that if the US dollar can break through 156, further upward space will be opened up, and the target may point to 158.50 or even higher.

From a technical perspective, the US dollar against the Japanese yen has formed an important support zone between 152 and 154, especially near the 200 day moving average, demonstrating strong buying power. During a short-term correction, this price may once again attract bulls to enter the market. It is worth noting that yesterday's single bullish candlestick not only reflects a strong reversal of market sentiment, but also means that the market's bullish sentiment towards the US dollar remains strong.

In addition, the latest core CPI data for the United States is 0.4%, significantly exceeding market expectations of 0.3%. This data point increases the market's expectation that the Federal Reserve will continue to maintain a tight monetary policy, especially against the backdrop of ineffective easing of inflationary pressures. The Federal Reserve's monetary policy continues to support the strengthening of the US dollar, providing fundamental support for the rise of the US dollar against the Japanese yen.

At the same time, the monetary policy of the Bank of Japan (BOJ) remains loose, and although there have been recent discussions on how to address inflationary pressures, there have been no substantial measures to change its loose stance. Under such a significant interest rate differential, market funds tend to flow towards US dollar assets with higher interest rates, further expanding the upward potential of the US dollar against the Japanese yen.

Future trend outlook

Taking into account both technical and fundamental factors, the US dollar is expected to maintain its strength against the Japanese yen in the short term. If the market successfully breaks through the 156 level, it may open up upward space towards 158.50 or even higher. The weakness of the yen will continue to be the main driving force behind the rise of the US dollar against the yen, especially with the support of US economic data and Federal Reserve policy expectations.

In the short term, any pullback to the support area around 152 or 154 may attract buying and provide a rebound opportunity. In the long run, as long as the Federal Reserve continues to maintain high interest rates and the Bank of Japan's monetary policy remains loose, the overall upward trend of the US dollar against the Japanese yen will be difficult to change.

It should be noted that if the US dollar continues to break through technical resistance levels against the Japanese yen, the market's risk appetite may further strengthen, driving asset allocation bias towards the US dollar globally. In addition, any external uncertainty events, especially sudden changes in US economic data or policies of the Bank of Japan, may affect short-term price fluctuations.

summary

In the current market context, the US dollar remains strong against the Japanese yen. As market expectations for Federal Reserve policies intensify and the structural weakness of the yen continues, the currency pair is expected to challenge the key technical level of 156 in the short term, further opening up upward space. The market should pay attention to the breakthrough of this key price point and the possible buying opportunities for a pullback in the future.