On Thursday (March 6th), the Japanese yen against the US dollar continued to attract bargain hunting and fluctuated around its high in recent months. The expectation of the Bank of Japan's interest rate increase continued to ferment, pushing the yield of Japan's 10-year treasury bond bonds to the highest level since June 2009, and further narrowing of the US Japan interest rate gap provided key support for the yen. However, the rise of the yen as a safe haven currency was partially limited by factors such as the recovery of market risk appetite, the rebound of US treasury bond bond yield and tariff comments. The current exchange rate of the US dollar against the Japanese yen is 148.455, a decrease of 0.28% from the previous trading day, showing a short-term volatile weak pattern.

Fundamental driving factors

Policy Trends of the Bank of Japan. The Deputy Governor of the Bank of Japan recently stated that if economic activity and inflation prospects meet expectations, monetary policy will be further adjusted. The market interprets this as a signal of interest rate hikes, driving up the attractiveness of yen assets. The yield of Japanese 10-year treasury bond broke through the 2009 high, and the interest rate gap between the United States and Japan continued to narrow, directly suppressing the exchange rate of the dollar against the yen.

The US economic data is weak. The ADP employment data for February in the United States only increased by 77000, far below the expected 140000, and the consumer confidence index also fell to a 15 month low. The weak data strengthened market expectations for the Fed's June interest rate cut, causing the US dollar index to decline for four consecutive weeks, hitting a new low since November last year.

The game between risk aversion and risk preference. Despite the market unease caused by tariff rhetoric, the White House's delay in imposing tariffs on automakers has eased some concerns, and the global stock market recovery has weakened the yen's safe haven demand. The fluctuation of short-term market sentiment has led to a long short tug of war in the trend of the Japanese yen.

technical analysis

30 minute chart: Weak oscillation, focus on breaking through the range

The current USD/JPY exchange rate is fluctuating narrowly around 148.30-148.80 on a 30 minute chart. The moving average system (MA50/MA100) interweaves around 148.50, with prices under pressure below the moving average, indicating a slight advantage of short-term bears. The DIF and DEA lines in the MACD indicator are located below the zero axis, and the continuous negative value of the bar indicates that the bearish momentum has not yet dissipated. RSI (14) is hovering in the 30-40 range, approaching oversold but not triggering a rebound signal. If the price falls below the support level of 148.30, it may accelerate its descent to the 148.00 level; On the contrary, breaking through 148.80 requires vigilance against short-term rebounds caused by short covering.

60 minute chart: The downward channel continues, with clear resistance suppression

The 60 minute chart shows that the US dollar against the Japanese yen has formed a standard downward channel after falling from a high of 151.30. The MA55 moving average (149.09) and MA100 (149.45) form strong resistance above, hindering multiple price rebounds in this area. Although the MACD indicator is below the zero axis, the narrowing of the bar indicates a slight decline in bearish momentum. RSI (14) is weakly consolidating around 40, and the market lacks sufficient buying to drive a trend reversal. If the resistance of 149.50 cannot be broken in the short term, the downward target still points to the 148.00 and 147.35 regions.

120 minute chart: Mid term bearish arrangement, limited rebound space

In the 120 minute chart, the USD/JPY moving average system (MA50/MA100/MA200) shows a bearish trend, with price rebounds repeatedly constrained by MA50 (149.20). The MACD indicator DIF and DEA lines are flat below the zero axis, and the bar is close to the zero axis, indicating that the medium-term bearish strength has been temporarily suspended but not reversed. RSI (14) rebounded to around 45, indicating a technical repair demand for the price, but multiple resistance factors converged in the upper 149.50-150.00 range, limiting the rebound height. The medium-term trend is still dominated by a volatile downward trend, and if the 148.00 level is breached, it may trigger a new round of selling.

Daily chart: bear market pattern stable, downward space open

At the daily level, the US dollar fell nearly 7% against the Japanese yen from its January high of 159.00, and the moving average system (MA50/MA100 below MA200) formed a "death cross", confirming a long-term bearish trend. The MACD indicator DIF and DEA lines are deeply trapped in negative areas, and the bar lines do not show significant convergence, indicating sufficient downward movement. RSI (14) is located near 35, far from oversold areas, with relatively low resistance to price decline. The key support is at the integer level of 148.00, which may drop below 147.35 and 147.00; The area above 149.50-150.00 forms strong resistance for rebound, making it difficult to break through.

Future Trends and Prospects

Taking into account both fundamental and technical factors, the USD/JPY exchange rate is expected to remain weak and volatile in the short term, making it difficult to reverse the downward trend in the medium term. The resonance of technical charts in each cycle shows bearish dominance: the lower edge of the 30 minute chart oscillation range is facing challenges, while the downward channels of the 60 minute and 120 minute charts are intact, and the daily bear market structure is stable. In terms of fundamentals, the expectation of the Bank of Japan raising interest rates continues to ferment, the US Japan interest rate differential narrows, and the pattern of the US dollar's weakness remains unchanged, with the yen still receiving fundamental support.

The potential risk point is that if the US non farm payroll data rebounds beyond expectations, it may briefly boost the US dollar and trigger a rebound in the exchange rate. However, the current market valuation of the Federal Reserve's interest rate cut is relatively sufficient, and the space for the US dollar to rebound is limited. Investors need to closely monitor the key support of 148.00. If it falls below it effectively, the exchange rate may accelerate its bottoming out; On the contrary, if the price remains above 148.30 or oscillates within the range of 148.30-149.50. Overall, the Japanese yen against the US dollar still tends to maintain its strength, and the strategy should focus on short selling at high prices. However, caution should be exercised against the risk of volatility amplification before and after the release of data.