USD/JPY May Stay Capped as U.S. Stocks Weaken and Yields Decline
Published: February 24, 2026
Market Overview
On the 23rd, USD/JPY declined from 154.96 to 154.00 in Tokyo trading. During U.S. and European hours, the pair rose to 155.04 before retreating to 154.22, eventually closing at 154.75.
For the 24th, USD/JPY is expected to trade mainly in the 154 range. Weaker U.S. equities and lower long-term Treasury yields may continue to restrain dollar buying and yen selling momentum.
Trade Policy Developments
According to media reports, the European Parliament on February 23 decided to postpone approval procedures for a previously agreed trade deal with the United States following the Trump administration’s announcement of a new 15% tariff measure.
The European Parliament’s trade committee had been reviewing legislation aimed at removing many import tariffs on U.S. products and was scheduled to vote on the agreement’s approval on the 24th.
Meanwhile, President Trump stated on social media that countries attempting to negotiate aggressively over tariff measures would face significantly higher duties.
Technical and Fundamental Analysis
- Technical: USD/JPY encountered selling pressure near the 155 level, while support has emerged around the lower 154 range. In the near term, the pair may remain confined within a 154-based trading range.
- Fundamental: Market participants warn that higher tariffs may ultimately raise costs for end users and consumers, potentially sustaining inflationary pressures and weighing on U.S. economic growth. Combined with declining Treasury yields, this may cap further dollar strength.
Key Takeaway for Investors
USD/JPY remains sensitive to movements in U.S. Treasury yields and equity markets. With renewed tariff tensions and softer stock performance, upside momentum in the dollar may remain limited.
In the short term, range-bound trading around the mid-154 level appears likely as traders monitor policy developments and interest rate expectations.
Disclaimer
This content is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument.
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