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USD/JPY recovers and steadies near 143.50 as the US Dollar trims earlier losses.
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Persistent concerns over the growing US fiscal deficit may continue to weigh on the Greenback.
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Japan’s Akazawa is set to visit Washington this weekend for the third round of trade negotiations.
The USD/JPY pair recovers earlier losses and stabilizes around 143.50 during European trading hours on Thursday, as the US Dollar (USD) regains traction after a three-day losing streak. The US Dollar Index (DXY), which measures the USD against a basket of six major currencies, rebounds to around 99.85 after dipping to a two-week low of 99.35 on Wednesday.
The recent weakness in the Greenback was driven by mounting concerns over the United States’ ballooning fiscal deficit. On Wednesday, President Donald Trump’s controversial tax-cut and spending legislation cleared the Republican-controlled House Rules Committee and heads for a full floor vote. The Congressional Budget Office estimates the bill could add $3.8 trillion to the national debt over the next decade, deepening fiscal imbalance and increasing the government’s debt servicing burden.
Looking ahead, investors await the release of flash US S&P Global Purchasing Managers’ Index (PMI) data for May at 13:45 GMT, which may provide further clues about the health of the US economy.
Globally, attention also turns to the upcoming third round of trade talks between the US and Japan. Japan’s chief trade negotiator, Ryosei Akazawa, is scheduled to visit Washington this weekend, and the market will be watching closely for any progress on bilateral economic relations.
From a technical perspective, USD/JPY remains under pressure, trading below the 20-day Exponential Moving Average (EMA) near 144.85, signaling a bearish near-term outlook. The 14-day Relative Strength Index (RSI) fluctuates within the neutral 40–60 range, indicating consolidation.
To the upside, a breakout above the May 13 high of 148.57 could pave the way for a move toward the psychological 150.00 mark and potentially the March 28 peak of 151.21. On the downside, a drop below the May 7 low of 142.42 could expose support levels at the April 22 low of 139.90 and the July 14, 2023 trough of 137.25.
USD/JPY daily chart
