Yen crosses, led by euro/yen, have fallen below their 52-week MAs, raising awareness that the yen’s depreciation trend may be coming to an end. Mexican peso/yen has also fallen below its 52-week MA, while the outlook for dollar/yen remains unresolved.
Euro/yen has remained substantially below its 52-week moving average for 5 consecutive weeks, based on its week-end closing price. Historically, a sustained move below the 52-week MA has often signaled a trend reversal. This has increased the possibility that the pair has shifted to a trend of euro weakness and yen strength.
The 52-week MA for Mexican peso/yen was around ¥8.93 as of 2 October, while the closing price was approximately 3% below that level, suggesting that the downtrend following the sharp decline in July 2024 may continue.
Dollar/yen fell below its 52-week MA at points in September, but as of 2 October it had remained above the ¥157.2 MA for 2 consecutive weeks and had not entered a prolonged, substantial decline below the MA. The yen’s strengthening trend has not been confirmed, and the situation remains unresolved.
Following action by the Japanese and U.S. authorities, including U.S. Treasury Secretary Scott Bessent, whether the yen will reverse toward strength is seen as dependent on developments ahead. Technical indicators, including the relationship with the 52-week MA, are one factor in assessing the outlook.
Overall, the article reports on efforts to identify the end of the yen’s depreciation trend using technical indicators as a guide, while the final conclusion remains unresolved.