Key Points
- Yen strengthens past ¥151 per dollar, hitting a two-month high.
- Trump’s 25% tariff plan reignites trade war fears, lifting safe-haven demand.
- Geopolitical tensions rise as Trump criticises Ukraine’s Zelenskiy.
- BOJ rate hike speculation grows, with focus on Friday’s inflation data.
The Japanese yen surged past ¥151 per dollar, its strongest level in over two months, as rising trade war risks and Ukraine conflict concerns pushed investors toward safe-haven assets.
Donald Trump’s announcement of 25% tariffs on automobiles, semiconductors, and pharmaceuticals stoked fears of global trade retaliation, lifting demand for the yen. Meanwhile, tensions escalated after Trump called Ukrainian President Volodymyr Zelenskiy a dictator, raising concerns over US-Russia peace talks and Kyiv’s exclusion from negotiations.
BOJ Rate Hike Bets Add to Yen Strength
The yen’s rally was also driven by expectations that the Bank of Japan (BOJ) will continue raising rates in 2025. While the central bank has not committed to a March hike, traders see signs of further tightening, making Friday’s inflation data a key catalyst for the yen’s next move.
Technical Analysis: Yen Strength Could Extend
Image: USD/JPY slides toward 150.175, with bearish momentum dominating as the Yen’s strength continue to build. Learn more on the VT Markets app.
USDJPY dropped 0.77%, closing at 150.291 from an open of 151.457, as the yen gained strength. The session ranged between 151.438 and 150.175.
Moving averages (MA 5,10,30) confirm bearish momentum, with price action trending lower. MACD (12,26,9) shows a deepening bearish divergence, signaling sustained downside pressure. Support is at 150.175, while resistance stands at 152.307. A break below support may fuel further yen gains, while any rebound toward resistance could trigger renewed selling.
Market Outlook
The yen remains in a strong position, benefiting from safe-haven demand, BOJ rate expectations, and trade war fears. If Friday’s inflation data supports further tightening, the yen could extend gains. However, uncertainty over BOJ policy and US economic developments may trigger volatility in USD/JPY.
