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Published: 22 May 2026,06:19
Daily Market Analysis New
*Crude oil prices eased from recent highs as softer U.S. rhetoric toward Iran improved expectations for a potential de-escalation and reduced supply disruption fears.
*Iran’s continued control measures in the Strait of Hormuz — including vessel checks and selective transit restrictions — are still creating supply and shipping uncertainties.
*Oil outlook remains cautiously bullish, with diplomatic progress potentially weighing on prices, while renewed tensions could quickly revive upside momentum.
The Japanese yen gradually weakened against its G10 peers in the wake of today’s release of softer-than-expected CPI data during the Tokyo session. April’s headline consumer price index rose 1.4% year-on-year, down from 1.5% in March and below market forecasts. The core measure, excluding fresh food but including energy, also eased to 1.4% from 1.8%, marking the lowest level in several years and remaining well below the Bank of Japan’s 2% target for a third consecutive month. A key core-core gauge favoured by the BOJ similarly declined, reinforcing signs of moderating underlying price pressures.
This inflation slowdown comes after recent yen-supporting interventions by Japanese authorities, which had provided temporary relief by curbing excessive weakness near the psychologically important 160 level against the US dollar. While the operations helped stabilise the currency in the short term, their impact has faded as structural factors — including wide interest rate differentials with major central banks and subdued domestic inflation momentum — reasserted themselves. The softer CPI reading further diminishes near-term expectations for additional BOJ rate hikes, reducing the yen’s carry appeal and contributing to its gradual depreciation across G10 crosses.
Near-term outlook for the yen remains cautious with downside risks. Renewed intervention threats from the Ministry of Finance could cap excessive weakness and limit sharp moves toward 160, but their effectiveness is likely limited without stronger domestic fundamentals. Persistent low inflation reduces the urgency for BOJ tightening, while any stabilisation or rise in global energy prices and resilient US data may sustain dollar strength.
Traders will watch upcoming indicators such as wage growth, retail sales, and BOJ communications for clues on policy direction. In the absence of hawkish surprises, the yen is expected to trade with a soft bias in the coming sessions, potentially testing recent lows unless fresh verbal or actual intervention materialises. Volatility is likely to remain elevated amid shifting global risk sentiment and oil market developments.
GBP/JPY is currently trading within a higher-low price structure, suggesting that the pair continues to maintain a constructive underlying trend despite facing resistance in the near term.
At present, the pair remains capped below its short-term resistance level around 213.60, making this a key area to monitor for the next directional move. A decisive break above this resistance could trigger a renewed bullish rally and potentially open the path toward retesting the recent peak near 214.25.
Momentum indicators continue to support the positive outlook. The Relative Strength Index (RSI) has been trending higher, reflecting strengthening buying momentum, while the Moving Average Convergence Divergence (MACD) has crossed above the zero line, reinforcing the view that bullish momentum remains intact.
Resistance Levels: 214.20, 215.75
Support Levels:213.00, 211.95
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