USD/JPY: Heavy buying off 118.50, bull trend highs re-tested

By FXStreet FXStreet (Bali) – USD/JPY has seen a vigorous rebound off 118.50 mid-round number, with new initiated-buying taking the exchange rate up towards 118.90 recent highs, with the Nikkei 225 also rising in sync, up by 1.42%.

Yen selling continues amid improved risk environment

The selling of Yens continues to be the dominant theme in the last few trading days, ever since USD/JPY touched the 116.00 handle, with Japanese officials starting to ramp up their rhetoric towards a cheaper Yen, while at the same time, chatter has been on the rise for the BOJ being forced to ease further to combat a potential decrease in inflation expectations by consumers.

USD/JPY technicals

Valeria Bednarik, Chief Analyst at FXStreet, notes: “The daily chart shows that the technical indicators are pointing to cross their mid-lines towards the upside with a strong upward momentum, although the 100 DMA hovers around 120.70, supporting some further gains, but not yet confirming a long term bullish trend.”

In the 4 hours chart, Valeria added: “The technical indicators retain their upward strength in overbought territory, while the price has extended above the 100 SMA for the first time since mid December, supporting a continued advance on a clear recovery beyond 119.00.”
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Source:: FX Street