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ZAR/JPY price analysis: Will it break 9.90?

By Piero Cingari

15:10, 26 November 2021

South African flag overlapping a Japanese flag
ZAR/JPY price analysis: Will it break 9.90? – Credit:

The recent discovery of a new Covid-19 variant (B.1.1.529) in South Africa triggered a widespread risk-off mood among investors today. The South African rand (ZAR) is one of the currencies most severely hit, while the Japanese yen (JPY) – traditionally a safe-haven asset – is outperforming all its peers.

In the forex market, the ZAR/JPY exchange rate is having one of its worst sessions since the start of the year, down by more than 3% on the day.

In terms of performance, the ZAR/JPY pair has been generally flat since the beginning of the year (+0.7%), but has dropped by 5.3% in the last month alone.

In early September, a “death-cross” – a chart pattern signalling the likelihood of a downtrend – appeared on the daily ZAR/JPY price chart. Since then, the rand has lost nearly 9% of its value against the yen.

With a 12% decline from its year’s highs and the presence of a death cross, where next for ZAR/JPY?

ZAR/JPY: the fundamental picture

The South African rand (ZAR) is highly sensitive to the commodity cycle and the prospects for global economic growth.

The emergence of a new strain of Covid-19, which originated in African countries including South Africa, heightens worries that states around the world will reinstate travel and mobility restrictions, jeopardising the ongoing economic recovery.

Typically, the rand gains when the global demand for commodities increases, and vice versa, particularly as South Africa is one of the world’s leading suppliers of precious  and ferrous metals.

An economic downturn might also reduce the prospects of the South Africa Reserve Bank (SARB) raising interest rates, which would be another factor weighing on the ZAR.


0.67 Price
+1.060% 1D Chg, %
Long position overnight fee -0.0073%
Short position overnight fee -0.0009%
Overnight fee time 22:00 (UTC)
Spread 0.00040


1.09 Price
-0.050% 1D Chg, %
Long position overnight fee -0.0080%
Short position overnight fee -0.0003%
Overnight fee time 22:00 (UTC)
Spread 0.00070


146.85 Price
-0.960% 1D Chg, %
Long position overnight fee 0.0113%
Short position overnight fee -0.0195%
Overnight fee time 22:00 (UTC)
Spread 0.090


1.27 Price
+0.640% 1D Chg, %
Long position overnight fee -0.0046%
Short position overnight fee -0.0036%
Overnight fee time 22:00 (UTC)
Spread 0.00170

In stark contrast, the Japanese yen, along with the Swiss Franc, have historically been seen as safe-haven assets that reliably outperform when market panic spreads.

For instance, at the end of February 2020, when the first European countries implemented lockdowns, the ZAR/JPY fell roughly 25% in the following month.

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How ZAR/JPY reacted after the first lockdown in 2020

A char showing the ZAR/JPY performance between February and April 2020How ZAR/JPY reacted after the first lockdown in 2020 – Credit:

ZAR/JPY technical analysis

From a technical perspective, ZAR/JPY has been trading in a bearish trend since early June, after the pair hit its highest level (8.15) since February 2019. The rand plunged to JPY7.1 at the end of August, only to rebound to the 7.9 region on 21 October, following a minor pullback in September.

The 14-day relative strength index (RSI) on the daily chart is in the oversold territory (25.33) for the first time since August 20. The pair is now trading 5.8% below its 50-day simple moving average (SMA) and at a 76.4% Fibonacci pullback level from its 12-month high at the end of August.

Since then, the ZAR/JPY exchange rate has declined by 13% to JPY6.99 last, with today being one of the worst sessions of the year (-3.14%).

The support level at 9.93, which corresponds to March 2021 lows, was held today at the first attempt of a breakdown by the pair.

If the bears continue to push the pair lower, a breach of this level might raise the likelihood of the pair next seeking support around the 9.70–9.60 level corresponding to January 2021 lows. A bounce off these critical levels might signal a profit-taking halt for bears, providing the ZAR/JPY exchange pair with some breathing room.

A chart showing the technical analysis of ZAR/JPYZAR/JPY daily technical analysis price chart – Credit:

The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving a at a decision.

Read more: Global risk assets slump as new Covid variant emerges

Markets in this article

0.86941 USD
-0.0063 -0.720%
7.888 USD
-0.005 -0.060%

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