The Japanese yen bounced back on Monday, snapping a two-day losing streak against the U.S. dollar as a fresh wave of safe-haven demand lifted the currency amid renewed concerns over geopolitical tensions and fragile market sentiment. The rebound came despite the yen’s ongoing struggles against a backdrop of ultra-loose monetary policy in Japan.
USD/JPY slipped to around 154.30, reversing part of last week’s gains as investors sought refuge in traditional safe-haven assets. The move followed headlines pointing to rising uncertainty in global markets, including volatility in equity indices and heightened caution surrounding the Middle East and other geopolitical flashpoints.
USD/JPY 1-D Chart as of April 24th, 2025 (Source: TradingInsider)
While the Bank of Japan continues to maintain accommodative policy settings, the yen often benefits in times of market stress as traders unwind riskier positions. Monday’s rebound suggests that sentiment remains fragile, with investors hesitant to fully embrace risk amid broader macro and policy concerns.
On the other side of the trade, the U.S. dollar remained firm overall, supported by strong Treasury yields and mixed expectations for Federal Reserve policy. However, the greenback’s rally has shown signs of slowing, especially as market participants weigh the likelihood of rate cuts later in the year.
Technical levels point to resistance near 155.00, with support seen around 153.80. The yen’s ability to sustain further gains may depend on both external risk drivers and signals from the BOJ, which has so far shown little urgency to tighten policy even amid rising global inflationary pressures.
For now, the yen’s recovery appears to be driven more by market nerves than fundamentals, but the move highlights how quickly risk sentiment can shift. Traders will be watching upcoming U.S. economic data and global headlines for clues on whether demand for safe havens will intensify further.
