- The dollar falls across the board amid improving risk sentiment.
- The yen trims losses against the dollar and falls further against other currencies.
- USD/JPY is overbought but still heading higher.
The USD/JPY reached a high of 144.98 on Wednesday, the highest level since 1998. After being unable to break above 145.00, the rally lost momentum and fell back to 144.20, due to a broad-based correction in the US dollar.
The greenback moved away from the highs during the American session, while Wall Street turned positive. At press time, the Dow Jones was up 0.80% and the Nasdaq was up 0.87%. Improved risk sentiment prevented a general rally in the yen.
The Japanese yen trimmed losses against the dollar but posted new lows against most currencies. DXY was in the red for the day at 110.15, after hitting a multi-year high at 110.78.
USD/JPY is still up over 400 pips from Tuesday’s opening level. The divergence between the Fed and the Bank of Japan remains the main driver of the rise. The 145.00 area has become the new resistance. On the downside, 144.20 is the immediate support, followed by 143.40.
On Wednesday, the Federal Reserve will publish the Beige Book. Second quarter growth data for Japan will be released on Thursday.
Technical levels
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
