USD/JPY rose to 159.29 on Friday, marking one of the weakest levels for the Japanese yen since July 2024. The yen's decline is heightening market concerns about possible intervention by authorities in the foreign exchange market.
The short-term Elliott Wave outlook for USDJPY indicates that the cycle from the January 28, 2026 low remains in progress, unfolding as an impulsive structure. From that low, wave (1) concluded at 157.72, followed by a corrective pullback in wave (2), which ended at 152.25.
The Japanese yen continued its strong downward trend, reaching its weakest level since 2024 as concerns about the Japanese economy accelerated. The USD/JPY exchange rate rose to 159.63, up by nearly 5% from its lowest point in January this year.
Looking at the 4-hour chart, the pair settled well above 158.00, the 100 simple moving average (red, 4-hour), and the 200 simple moving average (green, 4-hour). There is also a key bullish trend line forming with support at 158.20.
A major theme in Markets is the progressive repricing for a more persistent and damaging US-Iran-Israel war, which would have a long-lasting consequences on Oil prices.
USD/JPY update: The US Dollar surges against the Yen to new highs as escalating conflict drives Oil prices higher, reinforcing the Petrodollar. With rate traders pricing out 40 basis points of 2026 Fed cuts due to inflation fears, the Greenback maintains its outperformance.
USD/JPY extends gains as Fed repricing and rising Oil prices pressure the Yen
The American currency is moving higher, supported by rising Treasury yields.
The US Dollar is testing a breakout after the earlier-week liquidity sweep at support. It was the 99.68 level that has so far set the high as bulls haven't yet shown a willingness to test the very obvious resistance sitting at the 100-100.22 area in the DXY.
DXY strength is weighing on metals and major currency pairs as escalating Middle East energy disruptions lift Brent crude prices toward $100 again. The IEA's strategic reserve release may not be sufficient to offset supply disruptions, prompting some of the region's largest oil producers to halt or reduce operations.
USD/JPY remains stable near yearly highs as geopolitical risks, Fed policy loom
On one hand, the US dollar is strengthening due to increased demand for safe-haven assets. On the other, the Japanese economy is under pressure because of its heavy reliance on oil imports from the Middle East.