USD/JPY under pressure amid tariff jitters - OCBC

USD/JPY continues to trade with a bearish tilt as tariff uncertainty and questions over the dollar's safe-haven role persist. With FX talks between U.S. and Japanese officials on the horizon and Tokyo signaling it won't tolerate yen weakness, the downside bias remains intact--though oversold conditions may spark short-term rebounds, OCBC's FX analysts Frances Cheung and Christopher Wong note.

USD/JPY under pressure amid tariff jitters

"USD/JPY continue to trade with a heavy bias amid tariff uncertainty and growing doubts over USD's status as a safe haven/ primary reserve currency. This week, there was also confirmation that US Treasury secretary Bessent and Japan's Minister of Finance Kato will discuss FX matters. Kato also said that a weak JPY won't be tolerated when the nation needs to hold trade talks with US."

"Bias remains to sell rallies for USD/JPY. Pair was last at 142.76 levels. Daily momentum is bearish but decline in RSI moderated. Bias remains skewed to the downside but cautious of USD/JPY near oversold conditions. Rebound risk not ruled out but bias to fade. Resistance at 144.10, 145 levels. Support at 142 (recent low) before 141.60, and 140 levels."