On Tuesday (February 25th), the trend of USD/JPY remained complex. Recently, the US dollar has shown signs of rebounding against the Japanese yen, mainly influenced by the rebound of the US dollar and related policy movements in the United States. However, market sentiment and technical indicators indicate that although there may be room for a rebound in the short term, the overall trend still faces downward pressure. The following will provide an in-depth analysis of recent trends from both fundamental and technical perspectives, and explore future market trends.

Market background and fundamental analysis

The US dollar has experienced significant fluctuations against the Japanese yen in recent days. Last Friday, weak economic data released by the United States triggered market risk sentiment, especially with lower than expected PMI data for the service sector, exacerbating concerns about a slowdown in the US economy. At the same time, the rise in long-term inflation expectations in the United States has further boosted market risk aversion. This series of factors has driven the flow of funds to the Japanese yen, which has increased its demand as a safe haven currency.

The Connection between US Policies and the Foreign Exchange Market

A recent memorandum released by the US government proposes to further restrict Chinese investment and strengthen control over China's semiconductor industry. This policy trend, coupled with Trump's remarks about upcoming tariffs on Canada and Mexico, has led to a short-term rebound in the US dollar. The rebound of the US dollar is also reflected in the trend of the US dollar against the Japanese yen. According to analysis by well-known institutions, the US dollar rebounded to around 149.77, indicating some market support. However, due to the continued demand for safe haven of the yen and the narrowing of the yield gap between the US and Japan's treasury bond bonds, the rising space of the US dollar against the yen has been suppressed and may face further downward pressure.

The Impact of Bank of Japan Policies

From the perspective of Japan, although there have been no major policy announcements, the current low interest rate policy of the Bank of Japan (BoJ) still supports the yen exchange rate. The Governor of the Bank of Japan stated last week that the current level of interest rates reflects the recovery trend of the Japanese economy and hinted that if economic conditions continue to improve, the central bank may consider raising interest rates. This statement has provided support for the Japanese yen, making it stronger in terms of risk aversion.

technical analysis

On a technical level, the trend of the US dollar against the Japanese yen shows a certain level of complexity. In the short term, although there is a risk of rebound, the overall bearish market structure has not changed.

Daily chart analysis

From the daily chart, the US dollar against the Japanese yen is currently around 149.68, close to the key support level of 148.60. Previously, this support level had effectively constrained the downward trend multiple times, and it is expected that buyers will re-enter this price range to prepare for a subsequent rebound. However, if the price breaks through the support level of 148.60, it may exacerbate the downside risk and push the price further towards 140.00.

On the 4-hour chart, the current price trend shows a slight downward trend, mainly constrained by the short-term downward trend line. The current rebound momentum is insufficient, and sellers still tend to use this downward trend line to sell. If the price cannot break through this trend line, it is expected that the US dollar/Japanese yen will continue to decline and seek the next support range.

The 1-hour chart shows that the US dollar has broken through the anti trend line against the Japanese yen, and in the short term, sellers seem to dominate. The price has dropped to around 149.20 and is approaching the key support zone. If it falls below this support level, the risk of further exploring the 148.60 support zone increases. This trend is consistent with the current market risk sentiment, where sellers still have an advantage.

Future trend outlook

In the short term, the trend of the US dollar against the Japanese yen remains complex. Despite the technical risks of a rebound, the overall trend still leans towards a downward trend. With weak US economic data and rising risk aversion, USD/JPY may be suppressed, especially against the background of further narrowing the yield gap between US and Japanese treasury bond bonds.

Specifically, if the price breaks through the support level of 149.20, it may further drop to 148.60 or lower. On the contrary, if the US dollar can maintain above the current support level, there may be a certain rebound, but the upward space will be limited by strong resistance of 150.50 and 151.05. Considering the fluctuations in market sentiment and upcoming economic data such as the US Consumer Confidence Index and unemployment claims data, the trend of the US dollar against the Japanese yen will still be highly monitored.

Therefore, in the short term, the US dollar against the Japanese yen may continue to fluctuate and consolidate within the range of 149.20 to 150.50, and breaking through the above range may lead to further directional trends. Investors need to pay attention to the upcoming economic data and changes in market sentiment to determine whether there will be greater volatility.