Dollar-Yen Retreats After 200-Day Average Caps Latest Rally

Key Moments

Dollar-Yen Slips After Technical Rejection

The US Dollar (USD) slipped against the Japanese Yen (JPY) on Tuesday, though the broader uptrend in USD/JPY remains in place amid a risk-averse market backdrop. Buyers once again met strong resistance at the 200-day simple moving average (SMA) in the 158.50 zone on Monday, prompting a retreat in early Tuesday trading that pushed the pair to intraday lows below 158.30.

Japanese PPI Surprise Limits Yen Strength

Fresh Japanese data released earlier on Tuesday showed a sharper-than-anticipated slowdown in factory-gate prices. September’s Producer Price Index (PPI) declined 0.3% for a second consecutive month, defying expectations for a 0.5% increase. On a year-over-year basis, PPI rose 6.9%, underperforming forecasts that had pointed to a steady 7.6% gain, although the annual rate remains high enough to maintain pressure on the Bank of Japan (BoJ) to continue normalizing policy.

Later in the session, BoJ Governor Kazuho Ueda remarked that underlying inflation is moving closer to 2% and reiterated the central bank’s focus on keeping it anchored around that level, a stance that keeps the possibility of further rate hikes in play. The Yen’s reaction to Ueda’s comments was muted.

Dollar Pauses as Traders Await US Inflation Data

The US Dollar traded with a modestly softer tone during the Asian session, as US markets reopened following a partial closure on Monday. Market participants appeared reluctant to take large positions, preferring to wait for upcoming US Consumer Price Index (CPI) and Producer Price Index (PPI) releases later in the week, which could provide additional guidance on the timing of the Federal Reserve’s next interest rate increase.

Technical View: Bulls Struggle at 200-Day SMA

USD/JPY was last seen around 158.30, maintaining an overall constructive technical profile but with upside attempts consistently stalling below the 200-day SMA at 158.56. On the daily chart, the Relative Strength Index (RSI) is hovering near 55, while the Moving Average Convergence Divergence (MACD) remains slightly positive. Even so, the pair appears to require a fresh catalyst to convincingly break out above the current range ceiling.

Immediate resistance is located at the 200-day SMA at 158.56. A sustained move above this level would open the way toward the September 24 high near 159.00, followed by the psychologically important 160.00 region. On the downside, the lows from October 6 and 8 around 157.50 are expected to offer initial support for buyers, ahead of the late-September trough at 156.38 and the September 17 low at 155.34.

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

Japanese Yen Performance Against Major Currencies

The table below summarizes the percentage change of the Japanese Yen (JPY) versus a selection of major currencies today. According to this snapshot, the Japanese Yen has shown its strongest performance against the US Dollar.

The accompanying heat map described in the original report illustrates percentage moves between major currencies. In that framework, the base currency is selected from the left column and the quote currency from the top row. For example, choosing Japanese Yen as the base and US Dollar as the quote shows the percentage move for JPY (base)/USD (quote).