Yen Gains Support, But Japanese GDP Acts as a Brake
The USD/JPY pair failed to maintain the previous day's gains and was again held back at the 153.75 resistance area in Asian trading on Tuesday. Selling pressure emerged after the price touched this area, pushing USD/JPY down to the 153.25–153.20 range. However, this weakening did not yet indicate a strong bearish impulse as market participants were still holding large positions while awaiting the next catalyst.
The yen's slight strengthening was supported by a combination of diverging policy directions between the Bank of Japan (BoJ) and the Fed (Fed) and growing market vigilance regarding potential intervention to curb yen weakness. On the other hand, the US dollar also struggled to attract significant buyers amid expectations of a more dovish Fed, limiting the room for USD/JPY to strengthen.
However, bullish confidence in the yen is not entirely solid. The release of Japan's fourth-quarter 2025 GDP growth of only 0.2% (annualized)—far below the 1.6% forecast—raises the interpretation that the BoJ's urgency to tighten policy further may be diminishing. Furthermore, the risk-on mood could curb demand for the safe-haven yen, potentially keeping the USD/JPY decline contained if global sentiment improves.
Looking ahead, the market's primary focus is on Wednesday's FOMC meeting, which will be read for clues about the path to interest rate cuts. Following that, a series of US data—including activity indicators (such as flash PMIs) and Fed officials' statements—have the potential to trigger further moves. Given the current fundamentals, pressure on USD/JPY is likely to be downward, but volatility could still increase if there are any signals of intervention or surprises from the Fed's communications. (asd)
Source: Newsmaker.id
