Fundamental Analysis

  • The USD/JPY remains around 159, supported by expectations of progress in US-Iran nuclear talks, the Fed’s cautious stance on rate cuts, and the BoJ’s fading rate hike prospects. While the weekly uptrend persists, short-to-medium-term downward pressure continues. A "sell on rallies" strategy is deemed effective today. Strict risk management is essential, with a focus on monitoring key headlines and avoiding holding positions over the weekend.

The USD/JPY continues to trade around 159, driven by hopes for progress in US-Iran nuclear talks. Inflation concerns stemming from high oil prices and the Fed’s cautious stance on rate cuts are supporting the dollar. Furthermore, the fading expectation of an early interest rate hike by the Bank of Japan continues to weigh on the yen, maintaining the structural dollar-bullish/yen-bearish trend. In the Tokyo market at the start of the week, the pair briefly rose to the 159 level on rising oil futures, but dollar buying eased slightly on reports of renewed US-Iran negotiations.

On the weekly chart, the uptrend remains intact. The daily Hurst exponent of 0.632 confirms persistent trend momentum, while the Percentile Rank of 73.74 suggests no signs of overheating, leaving room for further upside.

The 4-hour chart shows continued medium-term downward pressure. While the daily chart maintains a bullish tone in long and mid-term moving averages, it remains in a "Bull Imperfect" state with short-term moving averages trending downward. The 4-hour Hurst exponent is 0.526, indicating a lack of clear direction. Although there is room for a short-term rebound from a low Percentile Rank of 28.28, the 1-hour chart’s long and mid-term moving averages are in a downtrend; thus, any upward turn in short-term averages should be viewed as a counter-trend move.

Strategy: A "sell on rallies" approach is recommended.

Entry: Wait for the confirmation of a stalling rebound around 159.00–159.40, followed by a candle closure.

Stop-loss: Above 159.65.

Profit Targets: First target at 158.20, second target at 157.80.

Currently, the priority for long positions is low unless a breakdown in the LinReg trend structure across all timeframes is confirmed. Keep positions small and be prepared to scale down immediately upon headlines regarding US-Iran talks or the Bank of Japan. The policy is to avoid holding positions over the weekend due to weekend risk.