- The US dollar retires against Japanese Yen, with Trump-Powell relations in the center of attention.
- Interest rates expectations favor the strength of the USD, but political uncertainty limits the profits of the USD/JPY.
- The USD/JPY retires with the resistance consolidating in 149.00.
The Japanese Yen (JPY) is trying to recover a part of the recent losses against the US dollar (USD) on Wednesday, since the expectations that the US president, Donald Trump, would fire the president of the Federal Reserve (Fed), Jerome Powell, intensified and then vanished.
After three consecutive days of profits, the USD/JPY reached a maximum intradic of 149.19 before retiring to quote about 148.00 at the time of writing.
While the US dollar began on Wednesday with a positive note, the USD/JPY stung during the morning session in the US. Both the New York Times and Bloomberg reported that Trump was asking other officials if he should let Powell go before his mandate ended in May 2026.
But then, when asked directly, Trump commented: “We are not planning to do anything, but we are very worried.”
Their comments occur in the midst of criticisms about the renewal of the Fed headquarters of 2.5 billion dollars and Powell’s perceived resistance to flexible monetary policy.
The ambiguity of Trump’s statement has added a layer of uncertainty to the markets that already deal with expectations of changing rates and geopolitical commercial risks.
The US Consumer Price Index (IPC) on Tuesday showed that the Federal Reserve (Fed) could refrain from cutting rates in the short term, since inflation increased at the consumer level. However, Wednesday’s producer price index (IPP) index demonstrated otherwise, since inflation remained flat at the producer level in June.
Technical analysis of the USD/JPY: Psychological resistance remains firm in 149.00
USD/JPY DAILY GRAPH
The USD/JPY daily chart shows a clear short -term bullish trend, backed by the 10 -day simple mobile average (SMA) crossing over the 50 -day SMA. The PAR recently broke above the Fibonacci recoil level of 38.2% of the fall from January to April, now maintaining support in 147.14.
Although the torque experienced a slight setback from this resistance, the relative force index (RSI) remains strong in 64, indicating a continuous bullish fortress without being overcompared.
The psychological level of 149.00 provides resistance, with 50% in 149.38, and an upward movement would open the door to the psychological level of 150.00 and towards the next level of resistance in the 61.8% decline in 151.62.
Meanwhile, a clear movement below 147.00 would suggest a possible pause in the rally or a deeper setback towards the 10 -day SMA in 146.70 and the 50 -day SMA about 145.00.
In general, the technical image favors buyers whenever the key support levels are maintained.
US Dollar – Frequently Questions
The US dollar (USD) is the official currency of the United States of America, and the “de facto” currency of a significant number of other countries where it is in circulation along with local tickets. According to data from 2022, it is the most negotiated currency in the world, with more than 88% of all global currency change operations, which is equivalent to an average of 6.6 billion dollars in daily transactions. After World War II, the USD took over the pound sterling as a world reserve currency.
The most important individual factor that influences the value of the US dollar is monetary policy, which is determined by the Federal Reserve (FED). The Fed has two mandates: to achieve price stability (control inflation) and promote full employment. Its main tool to achieve these two objectives is to adjust interest rates. When prices rise too quickly and inflation exceeds the 2% objective set by the Fed, it rises the types, which favors the price of the dollar. When inflation falls below 2% or the unemployment rate is too high, the Fed can lower interest rates, which weighs on the dollar.
In extreme situations, the Federal Reserve can also print more dollars and promulgate quantitative flexibility (QE). The QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is an unconventional policy measure that is used when the credit has been exhausted because banks do not lend each other (for fear of the default of the counterparts). It is the last resort when it is unlikely that a simple decrease in interest rates will achieve the necessary result. It was the weapon chosen by the Fed to combat the contraction of the credit that occurred during the great financial crisis of 2008. It is that the Fed prints more dollars and uses them to buy bonds of the US government, mainly of financial institutions. Which usually leads to a weakening of the US dollar.
The quantitative hardening (QT) is the reverse process for which the Federal Reserve stops buying bonds from financial institutions and does not reinvote the capital of the wallet values that overcome in new purchases. It is usually positive for the US dollar.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
