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MUFG analyst Lee Hardman suggests that the recent Japanese Yen (JPY) rebound against the US Dollar (USD) is unlikely to persist, citing a broader bearish trend for the Yen since the Middle East conflict began. The USD/JPY pair has been under downward pressure as geopolitical tensions and divergent monetary policies between the US and Japan continue to weigh on the Yen. Hardman emphasizes that the current rebound is a temporary correction within a longer-term bearish trajectory, driven by the Bank of Japan’s accommodative stance and the Federal Reserve’s hawkish policy.
For forex traders, this analysis highlights the importance of monitoring geopolitical risks and central bank policies. The Middle East conflict has amplified market volatility, with the Yen’s performance closely tied to Japan’s reliance on energy imports and its sensitivity to global risk-off sentiment. A sustained bearish trend in USD/JPY could impact carry trade strategies and hedging decisions for investors in the Gulf and beyond.
Looking ahead, traders should watch for developments in the Middle East conflict, potential shifts in Fed policy, and any unexpected BoJ interventions. The USD/JPY’s technical levels, such as key support and resistance areas, will also be critical for short-term traders assessing entry and exit points.
