During the Thursday trading session in the Asian market, the Japanese yen remained strong, mainly due to pessimistic expectations about the prospects of global trade negotiations, which boosted market risk aversion. In addition, there are reports that Japan may soon reach a new round of trade agreements with the United States, and the market is betting that the Bank of Japan (BoJ) will continue to raise interest rates in 2025, which together support the trend of the yen.

Japanese Finance Minister Katsuyuki Kato stated at the G7 meeting that the US tariff measures are extremely disappointing and are causing uncertainty in financial markets.

Japanese Minister of Economic and Social Affairs, Ryo Akazawa, is planning to travel to the United States before April 30th to engage in tariff related negotiations.

The US dollar is under pressure due to dovish expectations from the Federal Reserve

Although concerns about the independence of the Federal Reserve have eased recently, the market still generally expects the Fed to restart its interest rate cutting cycle in June and lower interest rates at least three times this year. The policy divergence with the Bank of Japan's interest rate hike has put pressure on the US dollar, failing to effectively shake off the shadow of years of lows.

US Treasury Secretary Scott Besant denied that the White House is considering unilaterally reducing tariffs on goods from Asian countries, and pointed out that the US is waiting for Asian countries to take action first.

Technical support for the trend of the Japanese yen, with significant short-term resistance between the US dollar and the Japanese yen

From a technical perspective, although the US dollar/Japanese yen briefly broke through the 143.00 and 23.6% Fibonacci retracement level of the March April decline, the upward momentum is limited.

Technical indicators show that short-term support is in the range of 142.45-142.00, but if it falls below 142.00, it may further fall back to the 141.00 or even 140.50 line. If the price returns and stabilizes above 143.00, it still needs to break through the key resistance of 143.55 and 144.35 in order to usher in a deeper rebound.

Editor's viewpoint:

Although market risk sentiment has partially rebounded, geopolitical risks and trade concerns still dominate investor psychology. Coupled with persistently high inflation in Japan and the Bank of Japan's shift towards hawkishness, the policy divergence between the United States and Japan is difficult to ease in the short term.