USD/JPY showed mild gains on Monday but stayed capped below 148. The pair had tested 151 last week before retreating sharply. Weak US jobs data and surging Fed cut bets continue to weigh on the dollar. Investors are cautious ahead of Tuesday’s PMI data.
The resignation of Fed Governor Adriana Kugler adds to the pressure. As a hawkish voter, her exit opens the door for a Trump nominee aligned with looser policy. This fuels concerns of deeper Fed dovishness and hurts US dollar recovery prospects.
Meanwhile, the Bank of Japan offered mixed signals. The central bank maintained a slow tightening stance but didn’t commit to clear timing for the next hike. Despite comfort with yen weakness, the lack of detail failed to support the Japanese currency.
In this environment, USD/JPY remains vulnerable. A break below 145 could trigger further downside. If US data continues to disappoint, the pair may trend lower if yen demand rises on renewed safe-haven flows.
The 4-hour chart for USD/JPY shows that the pair is consolidating between the 140 and 151 levels. A strong rebound in the US Dollar Index pushed the pair to test resistance at 151, but it failed to break above and moved lower. A breakout from this consolidation zone will determine the next direction. A break above 151 would signal a bullish move, while a break below 140 would indicate a bearish trend.
