{"id":434490,"date":"2026-07-23T17:18:08","date_gmt":"2026-07-23T10:18:08","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/usd-jpy-at-40-year-high-as-middle-east-tensions-and-hawkish-fed-bets-drive-breakout-434490\/"},"modified":"2026-07-23T17:18:08","modified_gmt":"2026-07-23T10:18:08","slug":"usd-jpy-at-40-year-high-as-middle-east-tensions-and-hawkish-fed-bets-drive-breakout","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/usd-jpy-at-40-year-high-as-middle-east-tensions-and-hawkish-fed-bets-drive-breakout-434490\/","title":{"rendered":"USD\/JPY at 40-year high as Middle East tensions and hawkish Fed bets drive breakout"},"content":{"rendered":"
\n

FUNDAMENTAL OVERVIEW<\/a><\/p>\n

\u00a0<\/p>\n<\/p>\n

USD:<\/p>\n

The US dollar started to regain ground in recent days as the prolonged
\n US-Iran conflict and surging oil prices trumped the hopes for a quick
\n de-escalation. The situation in the Middle East is getting even worse as the
\n Houthis started to disrupt the Bab el-Mandeb strait and the Red Sea. There\u2019s
\n still no end in sight to this crisis and the risk sentiment remains negative. <\/p>\n

Given this backdrop, we saw a hawkish repricing across the board with the
\n total Fed tightening now standing around 43 bps by year-end, compared to 32 bps
\n last week after the soft US inflation data. The chances for a rate hike at the
\n upcoming meeting in July have also risen back to 33%. <\/p>\n

The US-Iran conflict will continue to support the US dollar amid the Fed
\n tightening risk and negative risk sentiment. Traders will watch out for signs
\n of de-escalation as that could trigger a dovish repricing and weigh on the
\n greenback.<\/p>\n

JPY:<\/p>\n

On the JPY side, we got a Bloomberg
\n report yesterday saying that BoJ officials viewed the weaker JPY as adding
\n upside inflation risks and that they would be open to raise interest rates at a
\n faster pace. The report confirmed that the central bank is going to hold
\n interest rates steady at the upcoming meeting and revised its growth forecasts
\n higher. <\/p>\n

The JPY spiked to the upside
\n following the report as the probabilities for a rate hike in October rose but gave
\n back the gains pretty quickly as the overall fundamental picture remained unchanged.
\n The markets remain focused on the US-Iran conflict as oil prices continue to
\n surge into new highs.<\/p>\n

With the recent breakout, the
\n Japanese officials might start looking for stealth interventions to slow down
\n the depreciation although the trend is unlikely to change without a de-escalation
\n on the US-Iran front or a significant acceleration in Japanese inflation.<\/p>\n

\u00a0<\/p>\n

USDJPY TECHNICAL
\n ANALYSIS \u2013 DAILY TIMEFRAME<\/p>\n<\/p>\n

On the daily chart, we can
\n see that USDJPY<\/a>broke above the 162.85 level
\n and extended the gains into new cycle highs. The 162.85 level might now act as
\n support. If we get a pullback, the buyers will likely step in around the
\n support with a defined risk below it to keep pushing into new highs. The
\n sellers, on the other hand, will want to see the price falling below the
\n support to pile in for a drop into the 160.50 support next. <\/p>\n

USDJPY TECHNICAL
\n ANALYSIS \u2013 4 HOUR TIMEFRAME<\/p>\n<\/p>\n

On the 4 hour chart, we have
\n the upward trendline defining the bullish structure which is also adding
\n confluence to the 162.85 support. Again, the buyers will likely lean on the
\n trendline and the support to keep targeting new highs, while the sellers will
\n want to see the price breaking lower to position for a drop back into the
\n 160.50 support.<\/p>\n

USDJPY TECHNICAL
\n ANALYSIS \u2013 1 HOUR TIMEFRAME<\/p>\n<\/p>\n

On the 1 hour chart, there\u2019s
\n not much we can add here as buyers will continue to have a better risk to
\n reward setup around the trendline and support, while the sellers will need to
\n wait for a break below the trendline to open the door for new lows. The red
\n lines define the average daily range<\/a> for today. <\/p>\n

UPCOMING CATALYSTS<\/p>\n

Today<\/a>, we have the US Jobless Claims data, while tomorrow we conclude the
\n week with the Japanese CPI and the US Flash PMIs. The focus remains on US-Iran
\n headlines.<\/p>\n

\u00a0<\/p>\n

This article was written by Giuseppe Dellamotta at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

FUNDAMENTAL OVERVIEW \u00a0 USD: The US dollar started to regain ground in recent days as the prolonged US-Iran conflict and surging oil prices trumped the hopes for a quick de-escalation. The situation…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-434490","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/434490","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=434490"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/434490\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=434490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=434490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=434490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}