- Trader's Digest
- Posts
- Will Yen Keep Rising or Dollar Strike Back? 💰⚡
Will Yen Keep Rising or Dollar Strike Back? 💰⚡
Here's what you should know for Thursday, February 6
AtoZ Markets
February 05, 2025
📌 What’s TRENDING: Infinox Fined £99K by FCA for Failing to Report Trades
The USD/JPY pair took a sharp dive on Wednesday, dropping toward 153.00—its lowest level since mid-December. What’s causing the sell-off? Strong economic data out of Japan has fueled expectations that the Bank of Japan (BoJ) will continue tightening its policies, giving a boost to the yen.
A key report showed Japan’s nominal wages jumped 4.8% in December—the fastest increase in nearly 30 years—while real wages grew for a second straight month. With Japan’s services sector also expanding at its fastest pace since September 2024, markets are betting on more BoJ rate hikes ahead.
USD/JPY CHART
Meanwhile, the U.S. dollar is struggling. The latest JOLTS job data showed a slowdown in hiring, reinforcing expectations that the Federal Reserve will maintain its easing stance. This divergence—hawkish BoJ versus a dovish Fed—is making the yen an attractive bet.
From a technical standpoint, the USD/JPY break below 154.00 signals a bearish outlook, with further downside possible toward 152.45. Any recovery attempts could face resistance at 154.00 and 155.00, but for now, the yen is in the driver’s seat.
Traders will now turn their focus to upcoming U.S. data, including the ADP private-sector jobs report and ISM Services PMI, for the next market move. Will the yen continue its winning streak?