The USD/JPY is strengthened while commercial tensions and fed caution weigh on the dollar

• The USD/JPY extends its decline, quoting near the lower end of the range while safe refuge flows support Yen before the Fed decision.
• Commercial frictions between the US and Japan, together with US growth data that are weakened and geopolitical risks, tarnish the feeling of risk.
• The technical signals become bassists with the limited pair below key mobile socks, and impulse indicators suggesting more falls.

The USD/JPY is quoting weaker on Tuesday, around the 142.00 area while the demand for sure refuge strengthens the Japanese and in Japanese. Risk aversion has intensified as global investors respond to the high geopolitical uncertainty, including tensions in the Middle East, renewed commercial frictions and changes in the dynamics of global central banks. Market participants are waiting for the result of the decision of the Federal Reserve on Wednesday, with a particular approach in the guide of President Jerome Powell.

In Washington, the president of the USA, Donald Trump, held a joint press conference with Canadian Prime Minister Mark Carney, minimizing the need to renegotiate the USMCA and focusing on broader commercial priorities. Trump’s comments on China’s economic difficulties and the active negotiations of his administration with 17 commercial partners increased the restlessness in the market. Meanwhile, the Treasury Secretary, Scott Besent, confirmed that the US had formally rejected Japan’s application for tariff relief, maintaining the taxes of 10% and 14% on Japanese exports. Japan’s efforts to boost a comprehensive commercial agreement remain stagnant, increasing uncertainty in bilateral relations.

The US economic data continues to offer a mixed image. The March commercial deficit was extended significantly, which probably contributed to a downward review in the GDP figures of the first quarter. Although the PMI of April services rose to 51.6 from 50.8, internal components such as activity and employment disappointed. The GDPnow model of the Atlanta Fed now predicts a growth of the second quarter of 1.1%, a drastic fall with respect to the previous projections. Meanwhile, the Fed is expected to maintain stable interest rates on Wednesday, but the market will closely observe the Powell press conference in search of clues about the future rates. Operators currently value a rate cut for July and a second for the end of the year.

Japanese data is still scarce, but the country’s position in commercial discussions with the US is under scrutiny. Without an advance in tariff conversations, Japanese exporters face winds against, especially in car and metal sectors. In addition, a scheduled visit of US agricultural officials to Tokyo underlines the interconnected nature of commercial diplomacy, since Washington seeks concessions in several sectors.

Technical analysis

From a technical perspective, the USD/JPY is issuing biseistic signals. The pair is currently quoting near the bottom of its daily rank (142.35 – 144.27), lowering an −0.88% in the session. The relative force index (RSI) in 42,334 remains neutral, while the MACD gives a slight purchase signal, creating short -term noise. However, the amazing oscillator in −1.680 is flat, and the ADX (14) in 28,468 confirms the growing sales pressure.

Key mobile socks further reinforce the bearish perspective. The 20 -day SMA in 143.20, the 100 -day at 150.73 and the 200 -day in 149.67 all point down. The short -term tendency lines, including the 10 -day EMA in 143.41 and the SMA in 143.33, now act as superior resistance. A sustained movement below 142.00 could open the door to more losses, while only a break above 144.00 would relieve the current downward impulse.

With geopolitical tensions, mixed macroeconomic data of the US and not resolved commercial disputes between the US and Japan weighing on the feeling, the USD/JPy is still vulnerable in the short term. Fed communication on Wednesday will be a key factor in determining whether this downward trend is deepened or stabilized.

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