The US Dollar is facing stiff resistance against the Japanese Yen near the 161.75 level, a price zone that previously served as support, according to technical analysis. This rejection is a classic bearish signal, indicating that sellers are aggressively defending the level and capping further dollar upside.
Analysts at UOB Group have reinforced this cautious outlook, forecasting range-bound trading for USD/JPY between 160.60 and 163.00 in the near term. A break above 163.00 would signal a sustained bullish phase, while a drop below 160.60 could shift the bias to the downside. This mixed outlook reflects the ongoing tug-of-war between the Bank of Japan’s ultra-loose policy and the Federal Reserve’s cautious stance on rates.
For cryptocurrency markets, a potential yen strengthening—especially if the lower support breaks—could disrupt the widely followed yen carry trade. As the yen is often used as a funding currency for risk-on assets, a sharp appreciation might lead to unwinding of positions, injecting volatility into Bitcoin and altcoins. The technical levels in USD/JPY thus serve as an indirect but important signal for risk appetite across global markets, including crypto.
