USD/JPY Extends Losses Amid Dollar Weakness

The solana coinUSD/JPY currency pair continues its downward trajectory, trading near 154.30 during Thursday's Asian session. This marks the second consecutive day of declines as the US Dollar (USD) shows signs of fatigue against major counterparts. Several fundamental factors are contributing to this price action.

Japan's Economic Indicators Support Yen

Recent data from Japan revealed a significant improvement in the country's trade balance, shifting from a ¥377.8 billion deficit to a ¥366.5 billion surplus in March. This positive development provides fundamental support for the Japanese Yen (JPY). Additionally, safe-haven flows amid geopolitical tensions in the Middle East may be contributing to Yen strength.

Upcoming Inflation Data in Focus

Market participants are anticipating the release of Japan's National Consumer Price Index (CPI) data on Friday. Economists expect to see moderated consumer price growth for March, which could influence the Bank of Japan's policy trajectory. This data point carries significant weight for currency traders monitoring USD/JPY movements.

US Policy Developments Impact Markets

US President Joe Biden's recent proposal to triple tariffs on Chinese steel and aluminum has created ripple effects across global markets. While this policy primarily targets China, it may indirectly benefit Japanese exporters and support the Yen. The administration's trade stance could reshape regional economic dynamics in Asia.

Fed Policy Outlook Creates Counterbalance

Federal Reserve officials continue to signal a cautious approach to monetary policy. Cleveland Fed President Loretta Mester emphasized the need for more evidence of sustainable 2% inflation before considering rate cuts. Similarly, Fed Governor Michelle Bowman noted slowing progress on inflation, suggesting rates may remain elevated longer than some market participants expect.

Technical Levels to Watch

From a technical perspective, the USD/JPY pair shows the following key levels:

• Immediate support at 154.12 (Daily Pivot S1)
• Next support at 153.86 (Daily Pivot S2)
• Resistance at 154.70 (Daily Pivot R1)
• Major resistance at 155.00 psychological level

The 20-day SMA at 152.23 and 50-day SMA at 150.67 remain important longer-term reference points for traders.

Market Sentiment and Positioning

Current market positioning suggests traders are reassessing their USD exposure amid mixed signals from US economic data and Fed commentary. The Yen's recent strength reflects both domestic factors and broader risk sentiment in global markets. Participants should monitor upcoming economic releases and central bank communications for potential catalysts.