The Japanese Yen (JPY) sticks to its negative bias amid the upbeat market mood

The Japanese Yen (JPY) continues to exhibit a negative bias against the US Dollar (USD) as market sentiment remains buoyant, fueled by optimism surrounding China's economic stimulus and aspirations for a peace resolution in Ukraine. Such positive developments generally undermine the appeal of traditional safe-haven currencies like the yen. During the Asian session on Tuesday, the USD/JPY pair capitalized on its recent recovery from a five-month low, advancing beyond the mid-149.00s. Significantly, rising expectations for continued interest rate increases from the Bank of Japan (BoJ) could mitigate more significant losses for the JPY, driven in part by favorable outcomes from recent wage negotiations. It’s also noteworthy that speculation suggests the Federal Reserve (Fed) may commence cutting interest rates multiple times in 2025. This dynamic might disrupt the dollar's strength, impacting the USD/JPY pair further as traders brace for crucial policy announcements from both the BoJ and the Fed on Wednesday. From a technical standpoint, the USD/JPY's recent breakout above the 100-period Simple Moving Average (SMA) on the 4-hour chart, along with sustained strength above the 149.00 threshold, potentially indicates a bullish trend. The series of oscillators gaining positive traction adds weight to the possibility of further gains. However, any ascendancy toward the psychological 150.00 level is projected to encounter stiff resistance around the 150.75-150.80 region, as represented by the 200-period SMA. On the downside, vital support levels now lie around 149.20, 149.00, and 148.80. A decisive breach below these levels may signal that the recent rally is losing momentum and could lead the USD/JPY towards lower support boundaries. In broader markets, the ongoing geopolitical tensions, particularly in the Middle East, have led to gold prices soaring to record highs beyond $3,000, indicating a flight to safety among investors. Additionally, the EUR/USD pair is grappling with losses amid trade disputes, while the GBP/USD is experiencing a correction following gains. This news has been analyzed and reviewed by artificial intelligence, underscoring the complexities of currency trading influenced by numerous macroeconomic factors and market sentiment. As this scenario unfolds, traders and investors should exercise caution, given the fluidity of global events and their potential impact on currency valuations.