Dollar-Yen Pair Stable as Tokyo Inflation Figures Take Center Stage

The USD/JPY pair traded modestly higher around the 163.80 level on Tuesday, maintaining proximity to multi-decade highs as the Japanese Yen continued to draw limited demand. A softer US consumer confidence reading tempered the Greenback’s gains, although the pair retained its upward trajectory. The Conference Board’s Consumer Confidence Index dropped to 90.8 in July from a revised 92.2 in June, while the Present Situation Index fell for a third straight month to 114.9. The Expectations Index held flat at 74.7, indicating that US households remain cautious regarding current business and labor market conditions.

Geopolitical developments continue to remain in focus, with US President Donald Trump stating that Washington maintains a “very strong position” with Iran and describing the Pickaxe Mountain strike as “not a big problem.” Trump noted his preference for avoiding attacks on power plants and bridges, asserting he is “not looking to do that,” though he added that the US could strike additional targets if Tehran fails to reach an agreement.

Market attention is now turning to Tokyo’s inflation and employment figures. Tokyo CPI excluding fresh food is expected to accelerate to 1.7% year-over-year in July, up from 1.6%, while headline inflation previously stood at 1.7%. CPI excluding food and energy was previously recorded at 1.9%, and Japan’s Unemployment Rate is forecast to remain steady at 2.5%.

Short-Term Technical Analysis:

On the 4-hour chart, USD/JPY is currently trading at 163.85. The pair maintains a bullish near-term bias by holding above both the 20-period Simple Moving Average at 163.76 and the 100-period Simple Moving Average at 162.65, preserving the broader uptrend structure despite recent consolidation. The Relative Strength Index sits at 60.60, having eased from overbought territory yet still pointing to constructive momentum; this suggests that any dips are likely to attract buyers while the price remains supported by these averages.

On the topside, immediate resistance is located at the recent horizontal cap near 163.96; a clear break above this level would open the way for a fresh leg higher. On the downside, initial support is aligned around 163.76, where a horizontal level converges with the 20-period Simple Moving Average, followed by additional cushions at 163.64 and 163.59; a deeper pullback toward the 100-period Simple Moving Average at 162.65 would be needed to materially challenge the prevailing bullish structure.

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