USD/JPY Pulls Back From Fresh Highs Amid JPY Recovery

The USD/JPY pair has pulled back from fresh 40-year highs below 164.00, but remains contained at the 163.50 area.

According to analysts at MUFG, the recent JPY recovery is more related to short-covering of long US Dollar positions due to fresh hopes of a peace process in the Middle East than to any intrinsic Yen strength.

The pair's broader bullish trend remains intact despite this pullback, with key support lying at 162.80.

Technical analysis suggests that bears remain contained above previous highs in the mid-ranges of the 163.00s, but a break below these levels could put sellers in control and add pressure towards the July 17 and 20 lows at 162.15.