USD/JPY maintains modest advances as Hormuz shutdown boosts appetite for safe-haven assets

USD/JPY Holds Steady Amid Heightened Geopolitical Risks

On Tuesday, the USD/JPY pair is hovering around 159.70, marking a 0.27% increase, as investors respond to a significant rise in geopolitical tensions after reports that the United States has effectively restricted passage through the Strait of Hormuz.

The Japanese Yen is limiting the US Dollar’s gains as traders flock to traditional safe-haven assets in light of the growing uncertainty on the global stage.

However, Japan’s dependence on imported energy makes its economy especially vulnerable if Oil prices experience a prolonged surge.

Meanwhile, the US Dollar is benefiting from several supportive factors. Rising Oil prices are fueling concerns that inflation may remain persistent, which could prompt the Federal Reserve to delay any interest rate reductions. Additionally, US Treasury yields and equity markets are showing resilience.

Short-Term Technical Outlook

Examining the four-hour chart, USD/JPY is trading at 159.74, maintaining a positive momentum as it stays above both the 20-period and 100-period Simple Moving Averages (SMAs), currently at 159.09 and 159.26. Key horizontal support levels at 159.73 and 159.57 are providing a solid base, while the Relative Strength Index (RSI) approaches 62, indicating bullish momentum without yet reaching overbought territory.

Looking lower, immediate support is found near the 159.73 pivot area, followed by 159.57 and 159.51, where recent buying activity has been observed and the SMAs reinforce the support zone. On the upside, the next resistance is at 159.86; a decisive move above this level could signal further gains for the pair in the short term.

(This technical analysis was generated with the assistance of an AI tool.)