Certainly. Below is a rewritten version of the Forex article sourced from Mitrade (original article by Eno Eteng, CFA), with a minimum of 1,000 words and structured bullet points where appropriate.
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Title: USD/JPY Outlook: Japanese Yen Weakens as U.S. Treasury Yields Climb
Author: Based on the original article written by Eno Eteng, CFA, published on Mitrade
Date: September 2, 2025
The Japanese yen (JPY) continued to weaken against the U.S. dollar (USD) during early trading hours on Tuesday following a notable climb in U.S. Treasury yields. In the financial markets, the USD/JPY pair registered gains for the third straight day, reaching new multi-week highs and continuing a broader trend driven by macroeconomic dynamics in the United States and Japan.
Traders have been closely monitoring developments in bond markets and central bank policy moves, which are driving current momentum in major currency pairs. As U.S. Treasury yields rise, the dollar remains supported against a basket of currencies, with USD/JPY showing particularly strong upward pressure.
Market Dynamics Driving USD/JPY Price Action
The recent movement in the USD/JPY currency pair can be attributed to a combination of factors that are shaping sentiment in both the United States and Japan. The following elements play a significant role in the ongoing bullish trend exhibited by the USD/JPY:
• Rising U.S. Treasury Yields: The yield on 10-year U.S. Treasury notes recently climbed to its highest levels since July, attracting capital inflows into dollar-denominated assets and boosting demand for the greenback. Higher yields tend to drive appreciation in the U.S. dollar, particularly against low-yielding currencies such as the Japanese yen.
• Weak Japanese Economic Data: The yen continues to face downward pressure because of lackluster domestic data, including recent Industrial Production figures and Tokyo inflation readings. These indicators reinforce the Bank of Japan’s (BoJ) accommodative stance and support expectations that Japan’s central bank will maintain low interest rates, at least in the near term.
• Hawkish Tone from the Federal Reserve: Remarks from several Federal Reserve officials have maintained a hawkish undertone, leaving the door open for further rate hikes to manage inflation. This reinforces investor confidence in the dollar’s yield advantage against the yen.
• Technical Momentum: On the charts, the USD/JPY pair has moved through key resistance levels, attracting further buying interest among technical traders who interpret the latest breakout as a signal of brewing bullish momentum.
Latest Price Action and Technical Levels to Watch
• Current Price: As of the latest trading session, the USD/JPY pair traded around 147.68, marking a gain of approximately 0.5 percent from the previous day’s closing level.
• Recent High: The pair touched intraday highs near the 147.80 mark, setting a new monthly record.
• Resistance Levels:
– Immediate resistance lies at 147.80, a key level that has been tested several times in the last few sessions.
– A further push above 148.00 could expose the psychological resistance at 150.00, a level where the BoJ has previously expressed concern due to sharp yen depreciation.
• Support Levels:
– Initial support is around 146.35, aligning with the 20-day moving average (DMA).
– Further downside support is observed at 145.45 and 144.70, both of which previously acted as pivot points during periods of consolidation.
Monetary Policy Divergence: Fed vs. BoJ
A central theme affecting the USD/JPY currency pair is the wide divergence between monetary policy directions pursued by the Federal Reserve and the Bank of Japan:
Federal Reserve:
• After multiple rounds of interest rate increases from 2022 through 2024, the U.S. central bank has managed to bring inflation expectations under better control but remains cautious.
• Officials have indicated that further hikes are possible if
Explore this further here: USD/JPY trading.