The USD/JPY pair came under renewed selling pressure on Tuesday, slipping below the 153.00 level as expectations of further policy normalization by the Bank of Japan boosted demand for the yen. At the same time, subdued U.S. dollar performance added to the downside pressure.
Despite weaker-than-expected fourth-quarter GDP data from Japan, investors remain optimistic that government policies will support economic stability and allow the BoJ to continue its tightening path. This outlook has helped the yen strengthen, pushing USD/JPY lower toward the 200-day Exponential Moving Average near 152.50 — a key technical support level.
From a technical perspective, the MACD indicator remains below its signal line, although bearish momentum appears to be fading. The Relative Strength Index (RSI) sits around 38, reflecting subdued momentum with a slight bearish tilt. If the pair breaks below the 38.2% Fibonacci retracement level at 152.04, the next downside target could emerge near the 50% retracement at 149.74.
Holding above the 200-day EMA could help stabilize the pair and open the door for a potential rebound. A bullish MACD crossover and an RSI move above 50 would strengthen the case for recovery.
Overall, the next move in USD/JPY will depend on developments in Japanese monetary policy and upcoming U.S. economic data. A decisive break of key support levels could pave the way for deeper losses, while sustained support may provide a platform for a short-term bounce.
