USD/JPY was trading moderately towards 159.20 on Friday, with the US dollar (USD) finding support following the latest inflation data, while the Japanese yen (JPY) remains under pressure amid uncertainty over the Bank of Japan (BoJ) policy outlook.
The latest consumer staples (PCE) price index held steady at 3.3% y/y in April, reinforcing concerns that inflation remains elevated and supporting expectations that the Federal Reserve (Fed) may maintain a restrictive monetary policy stance for longer.
Meanwhile, the Japanese yen was weakened by the latest domestic data. Tokyo’s main consumer price index (CPI) inflation fell to 1.4% y/y in May, remaining below the BoJ’s 2% target for the fourth consecutive month, while industrial production unexpectedly rose in April.
The added caution came after BOJ Governor Kazuo Ueda warned earlier in the week that momentary energy shocks could become more persistent if they start to affect wages and inflation expectations.
Short-term technical analysis:
On the 4-hour chart, USD/JPY is trading at 159.24, maintaining a neutral bias as it swings between clustered support just below the point and layered resistance overhead. The pair is trading above the 100-period straightforward moving average (SMA) at 158.48, underpinning the broader uptrend, but remains capped by the 20-period SMA at 159.36, aligning with the horizontal barrier at the same level. The relative strength index (RSI) is hovering around 49, indicating sustainable momentum following recent consolidation, with neither buyers nor sellers in firm control near current levels.
Upside, immediate resistance appears at 159.25, followed by a narrower confluence around 159.36, where the 20-period SMA and horizontal converge to form a key upper boundary that bulls would need to reclaim to revive the uptrend. On the other hand, initial support appears at 159.20 ahead of 159.10, while the 100-period SMA near 158.48 offers a deeper bottom; a sustained break below this moving average would likely expose the pair to a more pronounced correction phase.
(The technical analysis for this story was written with the support of an AI tool.)
