JPY/VND remains under pressure in Asian trading, slipping toward the 164.50 area as renewed weakness in the Japanese yen combines with thin liquidity in the cross. The pair is hovering near its lowest levels since mid-2024, with downside momentum reinforced by both political uncertainty in Japan and cautious market sentiment toward Japanese assets.
The yen fell to its weakest level in around 18 months, touching 159.45 per dollar, as investors reacted to speculation around a potential snap election and a soft reception at a Japanese government bond auction.
According to The Yomiuri newspaper, Prime Minister Sanae Takaichi is considering early lower house elections on February 8, a move markets fear could open the door to fiscal stimulus and heavier debt issuance. The report coincided with the latest Reuters Tankan survey, which showed Japanese manufacturers’ confidence slipping to a six-month low in January.
At the same time, demand at a five-year Japanese government bond auction came in weaker than expected, limiting any rebound in the yen and keeping selling pressure intact.
Yen Pressured as Policy and Political Risks Build
Beyond domestic politics, broader global dynamics have also weighed on the yen. Recent U.S. inflation data showed consumer prices rose 0.3% in December, reinforcing expectations that the Federal Reserve will keep interest rates unchanged in the near term. This has reduced the appeal of defensive currencies such as the yen.
Meanwhile, global central bank officials and senior Wall Street executives publicly voiced support for Federal Reserve Chair Jerome Powell, following heightened political scrutiny in Washington.
Brian Martin, Head of G3 Economics at ANZ in London, warned that interference with central bank independence risks
Higher inflation, higher funding costs for governments, and increased volatility in economic activity.”
underscoring why markets remain cautious.
For the yen, this environment has translated into persistent selling rather than safe-haven demand, especially in less liquid regional crosses such as JPY/VND.
Vietnamese Dong Stability Adds to Downside Pressure
While yen weakness has been the dominant driver, the Vietnamese dong has remained relatively stable, benefiting from controlled domestic policy conditions and limited speculative flows. This imbalance has left JPY/VND exposed, with price action drifting lower on modest volume rather than sharp risk-off moves.
Thin liquidity continues to exaggerate downside moves, a recurring feature in this cross.
PY/VND Technical Analysis Today
- Price is trading below the 20-day Bollinger midline, confirming a bearish short-term structure
- The lower Bollinger Band near 164.80–164.50 is acting as immediate support
- A sustained break below 164.50 would expose 163.80, followed by the 162.90–163.00 zone
- Former support at 167.00–167.50 has turned into key resistance
- MACD remains firmly in negative territory, with no bullish crossover signal yet
JPY/VND Outlook
Unless the yen finds support from policy signalling or a shift in risk sentiment, JPY/VND is likely to remain biased to the downside. Political uncertainty in Japan, fragile bond demand, and ongoing thin liquidity conditions continue to favour sellers. Any rebounds are likely to be corrective rather than trend-changing at this stage.
Writer’s Trade Idea:
My preferred approach remains selling rallies toward 166.80–167.20, targeting 163.80, with a protective stop above 168.00.