The war in the Middle East intensified over the weekend, leading to gaps in the currency exchange. For USD/JPY, the spread was slightly lower at around 159.50, following comments over the weekend from Japanese Finance Minister Satsuki ‌Katayama, who expressed concern about the recent pointed depreciation of the Japanese yen and pledged to closely monitor markets and take action against excessive volatility.
Developments in the situation in the Middle East
The world woke up Saturday to the news that the United States (US) had attacked Iranian military facilities on Kharg Island, Iran’s main oil export hub. Tehran quickly responded by launching attacks on neighboring countries, including targeting the United Arab Emirates (UAE) and Iraqi centers. Hezbollah claimed responsibility for the attack on the US embassy in Baghdad.
As the weekend progressed, tensions increased, leading to massive, sustained attacks around the Strait of Hormuz. US President Donald Trump called on allies via Truth Social to facilitate secure the corridor, while in early Asia, the Wall Street Journal reported that a coalition was forming to protect the crossing, noting, however, that the debate on whether these operations would begin before or after the end of hostilities was still ongoing.
USD/JPY Short-Term Technical Outlook
On the 4-hour chart, USD/JPY is trading with a slightly bullish bias as price remains well above the rising 20-, 100-, and 200-period basic moving averages (SMAs), with the short-term average centered around 159.00 and tracking recent progress. The Momentum Index remains positive and the 14-period Momentum Index is above 0 despite weakening from recent highs. The Relative Strength Index (RSI) is hovering just below the overbought band near 69.
Immediate support appears at the 20-period SMA near 159.00, which protects a deeper pullback towards 158.50 and then 158.00, where the prior consolidation and rising 100-period SMA begin to converge. As long as the pair holds above these levels, buyers will remain in control, focusing on resistance at the recent high near 160.00, followed by a higher barrier near 160.50. A sustained break below 158.50 would weaken the bullish structure and expose another bearish level at 158.00, but the broader uptrend only carries more material risk as price holds above the 200-period SMA near 155.80.
(The technical analysis for this story was written with the facilitate of an AI tool.)
