Japanese Yen Strengthens Amid Suring JGB Yield

• Yesterday, Hawkish FOMC meeting minutes provided support for the U.S. dollar.

• The Japanese Yen has become the strongest safe-haven currency in the market and has gained against the G7 currencies.

• President Trump pushes quick Russia-Ukraine ceasefire agreement; uncertainty bolters the safe-haven gold.

Market Summary

The market‘s focus remained on the FOMC meeting minutes, seeking clues on the Federal Reserve’s monetary policy outlook. As expected, the Fed maintained a cautious stance, balancing a resilient U.S. economy with uncertainties surrounding the Trump administrations potential inflationary policies. Initially, the dollar strengthened post-release, but confidence in the greenback later waned, leading to a pullback.

In contrast, the Japanese yen surged, supported by a record high in JGB yields, reinforcing expectations of a BoJ rate hike. Meanwhile, the Australian dollar found support after better-than-expected employment data, aligning with the RBAs stance to keep policy restrictive to combat inflation.

Geopolitical tensions resurfaced after reports suggested Trump distanced himself from Ukraine‘s President Zelensky, leaving Ukraine’s future military aid uncertain amid the ongoing war. This complicated the Ukraine-Russia peace talks, fueling safe-haven demand and lifting gold prices to near $2,940.

In the crypto market, Bitcoin (BTC) and Ethereum (ETH) rebounded, breaking key resistance levels. The bullish breakout signals a potential trend reversal, as the market shakes off previous bearish momentum.

Current rate hike bets on 19th March Fed interest rate decision:

Source: CME Fedwatch Tool

0 bps (98%) VS -25 bps (2%)

Market Movements

DOLLAR_INDX, H4

The dollar edged higher after the Feds January meeting minutes reinforced a hawkish stance, citing persistent inflation and economic uncertainty. Policymakers signaled that rate cuts are unlikely soon, stressing the need for stronger evidence of easing inflation. This dampened risk appetite as markets adjusted to prolonged tight monetary conditions.

The Dollar Index is trading higher following the prior rebound from the support level. MACD has illustrated increasing bullish momentum, while RSI is at 50, suggesting the index might extend its gains since the RSI rebounded sharply from oversold territory.

Resistance level: 107.45, 108.40

Support level: 106.55, 105.65

XAU/USD, H4

Gold prices rebounded as safe-haven demand rose amid stalled Russia-Ukraine ceasefire talks. Tensions escalated after Trump warned Zelenskiy to negotiate swiftly or risk losing control of Ukraine. Meanwhile, U.S. and Russian officials met in Saudi Arabia—without Ukraine—fueling fears of a deal being struck without Kyiv‘s involvement. Putin welcomed the meeting’s outcome, adding uncertainty to the geopolitical landscape.

Gold prices are trading higher while currently testing the resistance level. MACD has illustrated diminishing bearish momentum, while RSI is at 55, suggesting the commodity might extend its gains since the RSI stays above the midline.

Resistance level: 2940.00, 2960.00

Support level: 2915.00, 2880.00

GBP/USD，H4

The Pound Sterling managed to withstand the strengthening U.S. dollar in the last session, with the GBP/USD pair experiencing only a minor technical correction. The dollar initially gained after the FOMC meeting minutes revealed a hawkish stance, reinforcing the Fed's cautious approach amid persistent inflation risks. However, upside momentum in the greenback was capped, as resistance levels limited further gains. Meanwhile, the Pound remained supported by an upbeat UK CPI reading, which exceeded market expectations and fueled speculation that the BoE might maintain restrictive monetary policy for longer.

GBP/USD remained sideways despite experiencing a slight correction yesterday, suggesting a bullish bias for the pair. The RSI is forming a lower-high pattern, while the MACD edged lower after the deadly cross, suggesting that the bullish momentum is easing.

Resistance level: 1.2730, 1.2850

Support level: 1.2485, 1.2375

USD/JPY, H4:

The yen strengthened as Japan‘s economic data fueled expectations of a more hawkish BoJ. Q4 GDP grew 0.7%, exceeding forecasts, while Tokyo’s core inflation hit 2.5% for the third straight month. Rising wages and improving consumer sentiment add pressure on the BoJ to tighten policy, keeping the yen supported.

USD/JPY is trading lower following the prior breakout below the previous support level. MACD has illustrated increasing bearish momentum, while RSI is at 29, suggesting the pair might extend its losses since the RSI stays below the midline.

Resistance level: 151.35, 152.75

Support level: 149.15, 147.50