The South African rand/yen pair rebounded after hitting a low in the ¥9.42 range last week, supported by political stability and persistently high resource prices. However, gains have remained capped around the ¥9.60 level amid yen-selling restraint by Japan and the US.
The South African rand/yen pair remained firm this week, falling to the ¥9.42 range in the first half of the week before rebounding sharply to the ¥9.59 range as buying resumed on expectations for stable resource prices and the GNU (Government of National Unity) in South Africa.
However, the pair also fell to around ¥9.46 at times as it tracked rising geopolitical risks in the Middle East and movements in USD/JPY. Although strong downside support was evident, gains remained limited. The pair recovered to the ¥9.60 range again at the weekend, but failed to extend its gains amid yen-selling restraint by Japan and the US, and continued to trade in a narrow range.
Fundamental analysis points to yen-selling restraint coordinated by Japan and the US as limiting gains in USD/JPY. Higher resource prices and political stability are the factors supporting the rand/yen pair. The South African Reserve Bank is cutting rates at a gradual pace, while persistently high gold prices are providing downside support.
Technically, daily and hourly charts show a pattern of rising lows. Resistance at ¥9.60–9.61 and an upper resistance zone at ¥9.68–9.70 are in focus. The focus this week is whether the pair can break through this resistance, with the expected range set at ¥9.50–9.65.