On Wednesday, March 19th, the focus of the foreign exchange market once again shifted towards the USD/JPY trend.Currently, the price of the US dollar against the Japanese yen is hovering around 149.278, with limited intraday fluctuations. After a brief dip, it quickly stabilized. However, bearish forces seem to be accumulating on the daily chart. The market sentiment is influenced by multiple intertwined factors: the latest statement by Bank of Japan Governor Kazuo Ueda, the weak performance of domestic economic data in Japan, and the moderate rebound of the US dollar from several months' lows, collectively shaping the current market pattern. As the Federal Reserve's decision is about to be announced during the US trading session, investors still need to remain highly vigilant about the trend of the Japanese yen.

Fundamentals: Policy signals intertwined with economic data

After a two-day monetary policy meeting that ended on Wednesday, the Bank of Japan announced that it would maintain its short-term interest rate target in the range of 0.40% -0.50%, which is in line with market expectations. The central bank pointed out in subsequent policy statements that the uncertainty of Japan's economic and price prospects remains high. At the press conference after the meeting, Governor Kazuo Ueda further elaborated on this position, stating that the central bank will guide policies from the perspective of sustainable and stable achievement of inflation targets, and continue to adjust the intensity of loose policies as the economic outlook gradually realizes. This statement did not provide significant support for the yen, but instead made the market cautious about its future interest rate hike path. Based on recent data, the momentum of Japan's economic recovery seems to be unstable, which undoubtedly weakens the attractiveness of the yen.

The Japanese economic data released earlier on Wednesday further intensified market concerns about the outlook for the yen. In February, the trade balance recorded a surplus of 584.5 billion yen, a significant improvement from the deficit of 415.43 billion yen in the same period last year, mainly due to an 11.4% year-on-year increase in exports and an unexpected 0.7% decline in imports. However, this positive news was offset by the weakness of other data. In January, core machinery orders fell 3.5% month on month, far ahead of the 1.2% decline in value. Although the year-on-year growth rate of 4.4% was slightly higher than the 4.3% in December, it still fell short of the market expectation of 6.9%. This reflects the contraction pressure on Japanese manufacturing activity at the beginning of the year. In addition, a Reuters Tankan survey showed that the manufacturing sentiment index in Japan declined from+3 in February to -1 in March, marking the first deterioration in three months. Enterprises have generally expressed concerns about the US tariff rhetoric, which further highlights the drag on the Japanese economy from the external environment.

At the same time, the positive results of Japan's spring wage negotiations (Shunto) have provided a glimmer of optimism for the market. The negotiation results show that for the third consecutive year, companies have significantly met union demands for wage increases, which may boost consumer spending and drive inflation back up, providing space for the Bank of Japan to raise interest rates in the future. However, this long-term positive trend is difficult to reverse the weakness of the yen in the short term. In contrast, the expectation of multiple interest rate cuts by the Federal Reserve this year has led to a significant narrowing of the US Japan interest rate differential, which has continued to suppress the upward potential of the US dollar against the Japanese yen in recent times. However, the moderate rebound of the US dollar on Wednesday still provides short-term support for the exchange rate.

Technical aspect: Key position game and trend signal

Currently, the US dollar is trading at 149.278 against the Japanese yen, with a narrower intraday amplitude. After a brief dip at the beginning of the session, it stabilized, but the daily level shows signs of increased bearish strength. From the multidimensional analysis of technical indicators, the exchange rate is facing a complex game of long-term trend suppression and short-term momentum conversion.

Moving average system: Long term bearish pattern remains unchanged

The 100 day moving average (153.242) and the 200 day moving average (151.89) form a rare "dead cross inversion": Normally, the 200 day moving average is below the 100 day moving average, but currently the two exhibit an inverted arrangement of "long-term moving averages lower than medium-term moving averages", indicating that the market has not yet formed a stable trend after intense fluctuations. These two moving averages form the iron top suppression above the exchange rate, highlighting the strength of rebound resistance with a distance of over 200 points from the current price.

The relationship between price and moving average: The exchange rate continues to operate below the 100/200 day moving average, and both show a downward slope, indicating that the mid to long term bearish trend has not reversed. Any attempt to test 151.89 (200 day moving average) upwards requires strong fundamental driving.

Bollinger Bands and Price Momentum: Short term Neutral to Short

The opening convergence of the Bollinger Bands: The channel formed by the upper track (153.505), middle track (149.864), and lower track (146.222) gradually narrows, indicating that the market is waiting for a directional breakthrough. The current quotation is below the medium track (149.278). If the medium track cannot be recovered within the day, it may further slide down to the 146.22 area of the lower track in the short term.

The critical point for long and short positions: the mid track of 149.86 becomes the intraday boundary between strength and weakness. If it stands firm, it is expected to test 150.80 (4-hour chart 200 cycle moving average), and if it falls, the bearish target points to the March low of 146.50.

MACD and RSI: bearish momentum weakened but not reversed

Contradictory signal of MACD indicator: DIFF (-0.930) and DEA (-1.222) are still below the zero axis, confirming the bearish dominant pattern, but the red bar of MACD bar (0.587) continues to contract, indicating a marginal easing of selling pressure. If DIFF crosses DEA to form a "potential golden cross" or trigger a technical rebound.

RSI neutral weak: The 14 cycle RSI (46.92) has exited the oversold zone but has not yet reached the 50 axis, reflecting cautious bearish market sentiment and a lack of unilateral breakthrough momentum.

Key position game and 4-hour chart structure

Upper resistance level: The psychological barrier of 150.00 and the 4-hour chart 200 cycle moving average (150.80) form a resonance suppression, and breakthrough requires hawkish signals from the Federal Reserve or fading demand for safe haven yen; Looking at 151.89 (200 day moving average) for higher resistance.

The support sequence below: 149.00 is the initial support for the day, and after losing, bears will test the intensive trading areas of 148.80 (4-hour 100 cycle moving average) and 148.20-148.25; In extreme situations, or stepping back to the low before 146.50.

Contradictory signal in 4-hour chart: The exchange rate recently broke through the 100 cycle moving average (148.80) and gained temporary support, but the rebound was blocked at 150.00, forming a potential downward channel of "high point downward movement". If it falls below 148.80, it may trigger accelerated selling.

Future Trends and Prospects

Looking ahead to the next few days, the trend of the US dollar against the Japanese yen will seek direction in a dual game of fundamentals and technology. The cautious attitude of the Bank of Japan towards interest rate hikes, coupled with weak domestic data, has made it difficult for the yen to shake off its weak label as a low yielding currency. Although the positive results of the spring wage negotiations have provided support for medium - to long-term inflation expectations, it is difficult to convert them into direct momentum for the Japanese yen in the short term. In terms of the US dollar, the Federal Reserve's decision will be the biggest highlight of this week. The market generally expects that the path of the Federal Reserve's interest rate cuts this year will become clearer. If hawkish signals unexpectedly weaken, the US dollar may once again come under pressure, and the trend of narrowing the US Japan interest rate differential may continue, thereby limiting the upward space of the US dollar against the Japanese yen. On the contrary, if the Federal Reserve releases a hawkish signal, the rebound momentum of the US dollar may accelerate the exchange rate to break through 150.00.

Overall, the current technical situation presents a nested structure of "large cycle suppression+small cycle repair": the long-term bearish trend is clear (suppression by the 100/200 daily moving average+movement below the MACD zero axis), but there is a short-term rebound opportunity (contraction of the MACD red bar+support by the 4-hour moving average). If the Federal Reserve decides to release hawkish signals to push the US dollar stronger, the exchange rate may briefly break through 150.00 and test 151.00; On the contrary, if the resolution leans towards dovish, the bearish momentum on the technical side may resonate and amplify, pushing the exchange rate to explore the 146.50 area. Traders need to be alert to the risk of unilateral fluctuations after breaking through the 149.00-150.00 range.