- For two consecutive trading sessions, the USD/JPY currency pair has rebounded from its recent strong losses, which reached the support level of 139.88, the pair's lowest in seven months.
- However, the upward rebound gains did not exceed the resistance level of 143.57 before the USD/JPY price stabilized around the 143.10 level at the beginning of today's Thursday trading session.
- Currently, the upward rebound gains for the currency pair increased amid improved investor sentiment due to Trump abandoning the idea of dismissing US Federal Reserve Governor Jerome Powell and the easing of trade tensions between the United States and China.
US Dollar Performance Witnesses Positive Development
According to forex market trading, the US dollar has rebounded from its lowest levels in three years amid easing concerns about the independence of the Federal Reserve and growing hopes for a de-escalation of the trade war. Recently, Trump stated that he has no intention of dismissing Federal Reserve Chairman Jerome Powell, allaying concerns about political interference in US monetary policy. Also, he indicated a softer stance toward China, saying he plans to be "very gentle" in any trade negotiations.
Meanwhile, US Treasury Secretary Scott Bessent acknowledged that the tariff standoff with China is unsustainable and stressed the need for both sides to de-escalate soon.
Despite the recent recovery, the US dollar remains down about 9% since the beginning of 2025 and has lost much of its safe-haven appeal in recent weeks amid ongoing trade tensions, recession risks, and political pressure on the US Federal Reserve, which has prompted many investors to move away from US assets.
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Trading Tips:
The USD/JPY trend remains bearish, and market tensions will ultimately support the Japanese yen.
US Stock Prices Rise Amid Easing Concerns:
During yesterday's trading and across stock trading platforms, US stock market indices closed higher, with the S&P 500 index rising by 1.7%, the Nasdaq index by 2.5%, and the Dow Jones Industrial Average by 419 points, as the easing of trade tensions between the United States and China, and Trump's confirmation that he would not dismiss Federal Reserve Chairman Jerome Powell, boosted sentiment.
However, the three US stock indices retreated from their highs, as investors questioned whether a trade resolution was imminent. US Treasury Secretary Bessent indicated that Trump had not proposed a unilateral reduction in tariffs and that talks with China had not yet begun, dampening early optimism. Clearly, this statement followed the President's remarks suggesting that tariffs might not remain at the current 145% level.
Meanwhile, Trump's change of tone toward Powell helped ease concerns about the US central bank's independence. Tesla shares rose 5.4% after CEO Elon Musk announced he would significantly reduce his involvement with the government to focus on leading his companies. Boeing shares also rose 6.1%, supported by improved aircraft deliveries.
USD/JPY Technical analysis and Expectations Today:
According to the performance on the daily chart, the overall trend for the USD/JPY currency pair remains bearish despite its recent gains. A break of the overall bearish trend on this timeframe will not occur without the bulls successfully pushing towards the resistance levels of 145.00 and 147.80, respectively. Conversely, on the same timeframe, the support levels of 141.70 and 140.00 will remain a real threat to the upward movement and important areas for strong bear control. After its recent gains, the 14-day RSI indicator is moving away from the oversold barrier, while the MACD indicator remains stable near the oversold peak so far.
The USD/JPY pair will be affected by the extent of investors' risk appetite, as well as the release of the US weekly jobless claims and durable goods orders figures.
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