Technical Analysis of the Yen Index
The Japanese yen index is trending downward on both the daily and 4-hour timeframes. Prices sharply declined after rebounding from a DFVG zone on the daily chart. On the 4-hour chart, a new FVG area has formed, which may act as strong resistance for further downside movement. With no major economic data today, the market is expected to remain relatively calm.
Fundamentally, the yen index remains stable, as the Bank of Japan has held its short-term interest rate steady between 0.0 – 0.10% since ending its negative rate policy in March 2024. Japan's globally lowest yield continues to pressure the yen's investment appeal, though geopolitical or trade tensions lend occasional safe-haven strength. Traders await the BoJ’s next meeting for signs of reduced bond purchases or a gradual rate hike, especially amid rising wages and inflation. Until a clear catalyst emerges, the index is expected to trade in a narrow sideways range near its 2025 average levels.
Liquidity Levels:
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Prices are expected to decline from the 737.7 level, targeting 735.5, followed by the next liquidity zone at 733.0.
