The USD/JPY pair exhibits a persistent downward trend, influenced by broad USD weakness. As of the latest observation at 140.34, OCBC’s FX analysts Frances Cheung and Christopher Wong maintain a bearish outlook.
Despite trade negotiator Akazawa’s statement that currency discussions were absent during recent trade talks, the potential for dialogue between US Treasury Secretary Bessent and Finance Minister Kato this week (anticipated on April 23/24) introduces the possibility of downward pressure on USD/JPY.
Given Finance Minister Kato’s prior assertion that JPY weakness would be unacceptable during trade negotiations with the US, a short position on USD/JPY is favored leading up to the Kato-Bessent meeting. However, the absence of conclusive outcomes regarding USD depreciation or JPY appreciation following the meeting could trigger USD short covering.
Technical indicators, including bearish daily momentum and an oversold Relative Strength Index (RSI), support the prevailing downward bias. Key support levels are identified at 140.00 and 139.60, while resistance is observed at 141.60 and 144.10.
