USD/JPY: Yen downside cushioned by JGB support – MUFG

💡 DMK Insight

The Japanese Yen’s potential underperformance amid rising geopolitical tensions is a critical concern for traders right now. With USD/JPY already climbing sharply from last week’s low, it’s clear that market sentiment is leaning towards the dollar as a safe haven. If geopolitical risks escalate, expect further pressure on the Yen, which could lead to a significant breakout above recent highs. Traders should keep an eye on key resistance levels in USD/JPY; a sustained move above these could trigger more aggressive buying in the dollar. Conversely, if the Yen starts to show unexpected strength, it might indicate a shift in risk sentiment that could catch many off guard. Here’s the thing: while the mainstream narrative focuses on the dollar’s strength, the Yen’s potential resilience in a flight-to-safety scenario could present hidden opportunities. Watch for any shifts in central bank rhetoric or economic data releases that could impact this dynamic. The immediate focus should be on geopolitical developments and their ripple effects on currency pairs, especially USD/JPY.