USD/JPY Outlook: Volatile Market after Iron Lady Takaichi’s Historic Win
Japan’s financial markets reacted positively right after the ‘Iron Lady’- Sanae Takaichi secured a decisive election victory, strengthening her position as Prime Minister of the Liberal Democratic Party (LDP). This made USD/JPY climb toward the 157–158 region, marking a two-week high and creating pressure on the Yen. However, the rally slowed as Japanese officials warned they were closely monitoring currency moves, triggering talk of possible intervention and helping the yen recover modestly.
“As always, we are watching market developments with a high sense of urgency. We remain in close communication with the market,” -Atsushi Mimura, the Finance Ministry’s vice minister for international affairs.
USD/JPY Market Update
From a fundamental trading perspective, USD/JPY continues to be driven by policy divergence. The Japanese Yen reached its weakest level in two weeks, while it was sharp 0.3% at 156.76 yen against the USD. The U.S. Federal Reserve is holding tighter monetary conditions. This gap keeps the dollar structurally stronger against the yen, supporting upside bias in the pair.
Technically, the recent rally shows signs of slowing momentum. Traders are watching support around the 100-hour SMA near 156.20–156.50 with MACD turning bearish and RSI below 50, while 158–160 remains a key resistance zone and a potential trigger area for official intervention.
The Japanese currency market is likely to remain volatile and range-bound. Upcoming U.S. inflation and labor data could quickly reverse sentiment. Retail traders should prepare for fast intraday moves and headline-driven price swings.
