The USD/JPY pair halted its four-day rally on Thursday, dropping to around 159.90 during Asian trading hours as the US Dollar weakened against the Japanese Yen. The reversal comes as risk sentiment improved following Wednesday’s announcement that Israel and Lebanon agreed to renew their ceasefire agreement, reducing geopolitical tensions in the Middle East.
The easing risk aversion is driving capital away from the safe-haven Dollar and benefiting the Yen, which also serves as a traditional haven currency but appears more attractive in the current environment. The shift marks a notable change in recent momentum that had pushed USD/JPY higher over the previous four sessions.
Traders and brokers should monitor whether this ceasefire holds and watch for any additional geopolitical developments that could further impact risk appetite and currency flows. The 160.00 level represents immediate technical resistance, while a sustained break below current levels could signal deeper Dollar weakness ahead.
FXnCO Insight
Position for continued Yen strength if Middle East tensions keep easing, with USD/JPY potentially testing support near 159.00 in coming sessions.
Source: FXStreet