USD/JPY Weekly Outlook

Despite escalating conflict in the Middle East, USD/JPY has rallied as traders prioritise what higher oil prices mean for the Fed’s policy outlook over traditional haven flows. With yield differentials regaining influence, guidance from Powell and Ueda could prove decisive in the days ahead.

Stronger U.S. payrolls and rising Treasury yields have reignited USD/JPY’s sensitivity to rate differentials. With inflation data looming, traders are watching for signs this shift has staying power.

Despite last week’s short-covering burst, USD/JPY remains rangebound as risk appetite holds up and U.S. Treasury markets calm. With trade noise still high and key data due, a breakout may have to wait.

Trade tensions, fiscal doubts and risk aversion are all stacking up against the U.S. dollar, with USD/JPY lurching lower. Even if Trump flips again, technicals suggest countertrend rallies provide selling opportunities.

Traders searching for clues in Moody’s downgrade may find little from past episodes. But in a market questioning U.S. credibility, USD/JPY could start to reflect that doubt.

Markets are placing bets on both economic data and diplomacy this week. USD/JPY strength has returned, but it now hinges on trade talks showing progress and U.S. data avoiding another soft patch. A misstep on either front could flip momentum quickly.

USD/JPY is trading more like a risk proxy than a haven, tracking bitcoin and equities while ignoring Fed signals. With Powell likely to say little, watch U.S. data and sentiment for the next move.

Risk sentiment has taken the driver’s seat for USD/JPY, but this week’s barrage of top-tier U.S. data and BOJ guidance may hand the reins back to fundamentals.

USD/JPY continues to shrug off traditional drivers like yield spreads and Fed pricing, aligning more closely with classic safe havens like gold and Swiss franc. Unless that dynamic breaks, trade headlines and Treasury auctions may prove more influential than central bank speech or second-tier data releases in the week ahead.

Yield differentials no longer matter for USD/JPY as haven demand takes over. With political risk front and centre, traders may keep sidelining data and rates commentary for now.

After a whiplash reversal to end last week, all eyes turn to Monday’s open in Asia. Was it hedging? Or was it the start of something bigger?