April 30 (Reuters) - The tables may have turned on the dollar, which until earlier on Thursday had made big gains against the Japanese yen.
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Shortly after the dollar surged to 160.72 yen, its highest point of 2026, it suddenly fell following a warning from Japanese Finance Minister Satsuki Katayama that the timing for "decisive action" was nearing. His choice of words typically would be interpreted in the market as a signal from Tokyo that it is about to intervene in the currency market.
From now, the dollar's position versus the yen may depend on what technical analysts call the Ichimoku cloud, a tool that uses a set of averages to help discern a currency's trend. The Ichimoku cloud acts as support when price trades above it, and resistance when below.
During its drop, the dollar fell below the daily Ichimoku cloud, which spans 156.00-157.83, according to EBS data supplied by LSEG. That’s a key technical region to watch.
If the dollar can rise back above the bottom of the cloud at 156.00 yen before Thursday's close, it may still be able to resume its climb against the yen. However, a close below that price would raise expectations of more losses for the dollar against the yen.
Complicating the picture further: Japanese markets will be closed on Monday through Wednesday for the holiday-studded Golden Week, which could cause wild swings in the yen due to thin liquidity, analysts say.
What the chart shows:
The dollar surged versus the yen to 160.72 on Thursday, its highest point of 2026, then fell sharply
The price has since dropped below the daily Ichimoku cloud, which spans 156.00-157.83
A sustained fall below 156.00 would raise expectations of further dollar losses against the yen
(Daily markets commentary from Reuters analysts on the signals financial charts are sending — and what they might mean.)
Martin Miller is a Reuters market analyst. The views expressed are his own.
