• USD/JPY holds firm after intervention drags the pair below 156.00.
• Iran’s proposal to Washington helped improve broader market sentiment.
• Traders now await US factory data, Fed speeches, and NFP data.

USD/JPY turns flat in the day after diving to a daily low of 155.48 during Friday’s session, in the aftermath of two straight days of Japanese authorities intervening in the FX markets to strengthen the Yen, which had weakened past the 160.00 figure. The pair trades at 156.67, flattish.

USD/JPY holds flat as Tokyo action fades and US jobs data looms next

On Thursday, Japanese authorities intervened in the FX markets. Data from the Bank of Japan on Friday revealed that it spent as much as $35 billion USD, slightly below the $36.8 billion used in the July 2024 intervention.

Meanwhile, traders cheered news that Iran submitted a proposal to Washington via Pakistan. The US extended the blockade affecting Iran’s economy, while the Iranian Parliament Speaker Mohammad Bagher Ghalibaf publicly criticized Washington’s policies on X, remarking, “Good luck blockading a country with those borders.”

The US ISM Manufacturing PMI in April steadied, coming at 52.7, unchanged from March, yet it showed that manufacturing activity remains solid. Meanwhile, three of the four dissenters at the Federal Open Market Committee (FOMC) meeting on Wednesday explained their reasons for dissenting.

Beth Hammack of the Cleveland Fed noted that inflationary pressures are expanding due to rising oil prices. She stated that including an easing bias is now inappropriate given current projections.

Neel Kashkari of the Minneapolis Fed warned that a lengthy closure of the Strait of Hormuz or damage to energy facilities could cause a price shock, prompting the US central bank to tighten policy to manage inflation expectations. In the meantime, the Dallas Fed’s Lorie Logan stated that the Fed’s next move could be a cut or a hike.

Next week the Japanese economic docket is absent. Conversely, the US economic docket is packed, with traders eyeing Factory Orders, Fed speeches, the ISM Services PMI, and plenty of jobs data, led by the report on April’s Nonfarm Payrolls.

USD/JPY Price Forecast: Technical outlook

In the daily chart, USD/JPY trades at 156.72, keeping a bearish near-term tone as it holds under the latest simple moving average cluster near 158.59 and below the descending trend-line drawn from 159.23. The pair still leans on underlying trend support, with price trading above the longer-term rising line that was last broken near 155.21, while the Relative Strength Index (14) at 37 suggests weakening momentum but not yet oversold conditions.

On the topside, initial resistance is located around the simple moving average cluster near 158.59, ahead of the descending trend-line barrier from 159.23 and the psychological horizontal cap at 160.00. On the downside, immediate support is seen at the reclaimed longer-term rising trend area near 155.21, with a deeper pullback exposing the shorter-term uptrend base around 153.39 if selling pressure extends.

(The technical analysis of this story was written with the help of an AI tool.)