USD/JPY Daily Chart Analysis

As of April 25, 2024, USD/JPY has successfully breached the 155 level, which has been a psychological resistance in the market. This breakthrough indicates a significant bullish momentum, likely driven by the market’s reassessment of intervention risks by the Ministry of Finance (MoF) and the Bank of Japan (BOJ). The absence of immediate action from Japanese officials may have emboldened traders to push the currency pair beyond previous expectations.

The currency pair’s ascent above 155.50 suggests that the path of least resistance is higher, potentially targeting the 156 mark. The technical landscape is supportive, with a robust carry trade environment underpinning the bullish outlook. The close above 155.50 is a confirmation of the upward breakout, which could further fuel the rally.

From a fundamental perspective, the anticipation of a positive U.S. Q1 GDP print could reinforce the currency pair’s ascent if the data indeed outpaces forecasts, validating the bullish sentiment in the market. On the flip side, risks to the bullish trend could arise from disappointing U.S. data or an unexpected shift in the Federal Reserve’s rate cut trajectory.

Looking ahead, upcoming economic releases such as the Tokyo CPI and the BOJ meeting may not pivot the current market trend unless there are unexpected policy shifts or announcements that challenge the established market sentiment.

Market Sentiments:

• Positive: 60%
• Negative: 20%
• Neutral: 20%

The sentiment remains predominantly positive, reflecting the diminished intervention risk and the favorable yield differentials supporting the USD/JPY rally. The downside risks appear contained, given the lack of current discussion on intervention thresholds among Japanese officials and the market’s focus on the carry trade benefits.