CORRECTED-BUZZ-COMMENT-USD/JPY fades as trade truce exuberance recedes

Corrects daily Ichimoku cloud levels in 4th paragraph

May 14 (Reuters) – News of a trade truce and reduced tariffs between the U.S. and China took equity markets, U.S. yields and the U.S. dollar higher Monday. Yet some tariffs are bound to remain, crimping global trade and growth nL4N3RL033, and likely capping further equity market, Treasury yield and dollar rallies.

USD/JPY already shows signs of pulling back, falling to 147.01 in Asia Wednesday from a high of 148.65 EBS Monday. Further declines are possible.

Japanese exporters and other yen buyers have been busy since Monday. With Japan Incbudgets for fiscal 2025/26 assuming 147.00+ nAZN3N4ASM, exporter moves are not surprising.

Technically, USD/JPY has retreated below its descending daily Ichimoku cloud between 147.60-149.97, rejecting the brief foray into the cloud on Monday-Tuesday. The chart suggests USD/JPY may have been overbought, and moves towards the tenkan line at 145.50 could be in the cards.

USD/JPY has also fallen back into its hourly Ichimoku cloud currently indicated between 146.73-147.69. A break below the cloud targets tests of the ascending 100-hour moving average at 146.37 and maybe even the 200-HMA at 145.13.

Although the possibility of further upside jolts to USD/JPY cannot be dismissed on the back of fresh U.S. trade policy news, the bias will remain to the downside for many Tokyo players with rallies still viewed as selling opportunities.

In this regard, possible talks on FX between Japanese Finance Minister Katsunobu Kato and U.S. Treasury Secretary Scott Bessent on the sidelines of the upcoming G7 meetings will be closely watched nP8N3R9030, nL1N3RL017.

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(Haruya Ida is a Reuters market analyst. The views expressed are his own. Editing by Sonali Desai)

((haruya.ida@thomsonreuters.com;))