The Japanese yen remains close to a minimum of two weeks against a slightly stronger dollar

• The Japanese Yen struggles for attracting buyers while commercial optimism undermines safe refuge assets.
• A modest USD rebound provides additional support to the USD/JPY, although the rise seems limited.
• Divergent policy expectations between the BOJ and the Fed could continue to act as a wind against the pair.

The Japanese Yen (JPY) remains about a minimum of almost two weeks reached in front of his American counterpart the day before, although any additional fall seems elusive. The last optimism about a positive result of commercial conversations between the US and China is considered a key factor that undermines the traditional JPY secure refuge status. To this is added a modest rebound of the US dollar (USD) that raises the USD/JPY torque above the 145.00 psychological brand during the Asian session on Wednesday.

However, a combination of factors should help limit the deepest losses of the JPY. A Federal Court of Appeals ruled that the tariffs of US President Donald Trump can continue in force while legal appeals continue. This adds a layer of uncertainty in the markets, which, together with the bets that the Bank of Japan (BOJ) will continue to raise interest rates, should act as a tail wind for the JPY. In addition, moderate expectations of the Federal Reserve (FED) should limit the dollar and the USD/JPY.

The Japanese Yen Alcistas remain defensive despite the hard line expectations of the BOJ

• The investors were cautious after a Federal Court of Appeals dictated that the “Liberation Day” tariffs of President Donald Trump about most commercial partners could remain in force while reviewing a decision of a lower court that blocked them. However, the Court has not yet pronounced on whether tariffs are permissible under a law of emergency economic powers that Trump cited to justify them.
• The data published last week showed that Japan’s economy contracted less than initially estimated during the first quarter. To this is added that the increasing inflation signs support the case for a greater normalization of the policy by the Bank of Japan. This continues to act as a tail wind for the Japanese Yen, although optimism about commercial conversations between the US and China keeps the bundles defensive.
• China’s Vice Minister of Commerce, Li Chenggang, told journalists that Chinese and American negotiators have agreed a framework for trade after two days of conversations in London. The US Secretary of Commerce, Howard Lutnick, said the framework was the first step to eliminate negativity, and the implementation plan should result in resolving rare earth problems and magnets.
• The optimism derived from the positive result of the crucial commercial conversations between the US and China continues to support a generally optimistic tone in the variable rental markets. This undermines the safe refuge status of the JPY. In addition, the signs of relaxation of tensions between the two largest economies in the world help the US dollar attract some buyers and act as an additional tail wind for the USD/JPY torque.
• The operators reduced their bets that the Federal Reserve will cut interest rates in the coming months after the publication of the US Non -Agricultural Payroll (NFP) report on Friday, which pointed to a resistant labor market. However, operators are still valuing about 0.45% relaxation by the end of the year, marking significant divergence compared to the hard line expectations of the BOJ.
• The operators now expect the publication of the US Consumer Price Index (CPI), which is expected to show an increase that could reinforce the waiting position and see the Fed towards a greater relaxation. However, the crucial data will be examined in search of clues on the path of fees of fees of the Fed, which, in turn, will influence the USD price dynamics and provide a new impulse.

The USD/JPY seems prepared to continue going up while above the 200 periods in H4

From a technical perspective, acceptance above the simple mobile average (SMA) of 100 periods and positive oscillators in daily/hour graphics favor the USD/JPY bulls. However, repeated failures to build on the impulse beyond the psychological brand of 145.00 make it prudent to wait for some follow -up purchase beyond the 145.30 area, or a maximum of two weeks reached on Tuesday, before positioning themselves for more profits. Cash prices could then overcome the intermediate barrier of 145.60-145.65 and aspire to recover the round figure of 146.00 before climbing more towards the region of 146.25-146.30, or the maximum of May 29.

On the contrary, the SMA of 200 periods in the 4 -hour graph, currently located near the 144.30 area, could now protect the immediate decline before the 144.00 mark. A convincing rupture below the latter will cancel the positive perspective and change the short -term bias in favor of the USD/JPY bassists. The subsequent fall could drag cash prices to the region of 143.60-143.50 on route to levels below 143.00.