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Currencies USD/JPY

Japanese Yen Remains Stable as BoJ-Fed Policy Divergence Offset Geopolitical Hopes

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  • August 19, 2025
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Japanese Yen (JPY) remains range-bound versus the US Dollar (USD) as conflicting fundamental signals remain vigilant. The hawkish policy by the Bank of Japan and prospects of a rate increase by the end of the year underpin the JPY, while the hoped-for rate cuts in September by the US Federal Reserve showcase an abrupt policy divergence. But hope for a Russia-Ukraine peace agreement undermines safe-haven demand, capping Yen’s gains. Market players now anticipate major events, such as the publication of FOMC Minutes, Fed Chairman Jerome Powell’s address at the Jackson Hole Symposium, and worldwide PMI releases, for new guidance in the USD/JPY cross. KEY LOOKOUTS • Hopes of a year-end BoJ rate increase are in contrast with the Fed’s forecasted September rate reduction, supporting JPY. • Expectations of a Russia-Ukraine peace agreement diminish safe-haven appetite, serving as a headwind for the Yen. • Global Flash PMIs on Thursday and US housing statistics may impact sentiment and USD demand. • FOMC Minutes and Powell’s Jackson Hole speech will be important to set expectations around the Fed’s rate-cut trajectory and USD/JPY direction. The Japanese Yen is still trading in a range against the US Dollar as investors balance contrasting monetary policy directions and geopolitical events. Although the hawkish tone of the Bank of Japan and expectations for a year-end rate hike support the JPY, the Federal Reserve’s planned September rate cut highlights a stark policy divergence. Nevertheless, hopes for a possible Russia-Ukraine peace agreement have eased safe-haven demand, limiting Yen appreciation. Traders then shift their attention to pivotal drivers such as FOMC Minutes, Fed Chair Powell’s address at the Jackson Hole Symposium, and international PMI announcements for better indications on the USD/JPY pair’s next direction. Japanese Yen holds in a narrow range as BoJ’s hawkish rhetoric is pitted against the Fed’s anticipated rate cuts. Geopolitical optimism regarding a Russia-Ukraine peace agreement keeps safe-haven demand muted, while soon-to-be-released Fed cues and PMI readings will dictate USD/JPY direction. • The Japanese Yen continues to be held within a three-week trading band versus the US Dollar. • The Bank of Japan will be expected to raise interest rates by year-end, underpinning JPY strength. • The Federal Reserve is widely expected to start reducing rates in September, leading to a steep policy divergence. • Hopes for a potential Russia-Ukraine peace agreement diminishes safe-haven demand for the Yen. • Japan’s better-than-expected Q2 economic growth leaves the door ajar for BoJ tightening. • Investors are following FOMC Minutes, the Jackson Hole speech by Powell, and US housing releases closely for USD signals. • Charts indicate resistance at 148.00 and support at 147.00, a break either way poised to determine the new trend. The Japanese Yen is well within a tight range against the US Dollar with investors weighing conflicting monetary policy expectations with changing global sentiment. The Bank of Japan has indicated normalization policy commitment as markets look for an eventual rate hike by the end of the year. Such a position is informed by better-than-projected domestic growth and updated inflation projections, pointing to Japan’s resilience in its economy in the face of external shocks. Meanwhile, the Federal Reserve is set to initiate its rate-cutting cycle in September, adding to a sharp policy contrast between the two central banks. USD/JPY DAILY PRICE CHART SOURCE: TradingView Simultaneously, geopolitical events are setting the tone for risk appetite and demand for safe-haven assets such as the Yen. Hopes of a potential peace agreement between Russia and Ukraine, stoked by plans for top-level talks, have relieved some investor angst and cut safe-haven flows into the JPY. Market participants are now paying close attention to significant events like FOMC Minutes releases, Fed Chair Jerome Powell’s address at Jackson Hole later this week, and international PMI numbers, which are likely to give better cues about worldwide economic momentum and dictate the next direction in the USD/JPY price. TECHNICAL ANALYSIS USD/JPY also remains to consolidate in a clearly defined band, with the 148.00 level being a significant resistance on the upside and the 147.00 area providing near-term support. A break above 148.00 could potentially pave the way for additional advances towards the 148.55–148.60 area and maybe even the psychological 149.00 level. On the other hand, a fall below 147.00 would risk exposing the pair to lower losses toward the support zone around 146.20, with a fall beneath 146.00 turning the bias in favor of bearish momentum. Overall, the range-bound nature accentuates indecision, and traders would prefer waiting for a firm breakout before positioning for the subsequent trend. FORECAST If USD/JPY is able to resist below the 148.00 resistance, it may draw new buying pressure, opening the door to a move higher towards the 148.55–148.60 area, which is a key retracement point. A clean break above this area would propel bullish energy and take the pair toward the 149.00 psychological level, where additional gains might be tested based on Fed commentary and sentiment. Conversely, if the pair is unable to maintain the uptrend and drops below the 147.10–147.00 support level, selling interest may become more significant, and the 146.20 area reached last week may come under threat. A break below this level would shift the bias to the sellers’ advantage, and the pair would become susceptible to re-testing the 146.00 level, with potential for further losses if safe-haven buying returns or Fed policy expectations move more dovishly.

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Currencies USD/JPY

Japanese Yen Recover From One-Week Low Against USD, But Gains Capped Despite Mixed Signs

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  • July 28, 2025
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Japanese Yen (JPY) recovered mildly from a one-week low against the US Dollar (USD) at the beginning of the new week following a recent trade agreement between Japan and the US that suggests a possible Bank of Japan (BoJ) interest rate hike later this year. Yet the JPY’s upside seems limited with the softening of inflation in Tokyo, increased domestic political risk, and a general risk-on market mood due to better global trade sentiment. In the meantime, investors tread carefully before crucial central bank decisions from the Fed and BoJ, as well as high-impact US economic releases, all of which could heavily impact the USD/JPY pair’s next major move. KEY LOOKOUTS • Traders wait for this week’s announcements by the Bank of Japan and US Federal Reserve policy for guidance on upcoming interest rate moves, which should significantly impact the USD/JPY cross. • This week’s major US releases such as Q2 GDP, PCE Price Index, and Nonfarm Payrolls might lead to USD/JPY volatility. • Heightening domestic political uncertainty after the recent election loss of the ruling coalition might hold back any tightening action by the BoJ, softening the JPY. • Break above 148.65 might extend to the 149.00 level, while below 147.00 and support thereabouts may provide buying opportunities for the traders. The Japanese Yen began the week with a gentle correction from its recent one-week low versus the US Dollar, underpinned partly by optimism over a trade agreement between Japan and the US, reviving speculation about a possible Bank of Japan rate increase later this year. Nevertheless, the currency’s upside is capped on mixed fundamentals such as weakening inflation in Tokyo, domestic political uncertainty, and better global risk appetite that is shrinking safe-haven demand. Traders are walking on eggshells in anticipation of pivotal central bank decisions from both the Federal Reserve and the BoJ, as well as the all-important US economic data releases, all of which are likely to figure in the next major move for the USD/JPY currency pair. Japanese Yen creeps up from one-week low against the US Dollar but is capped on upside by mixed economic cues and risk-on sentiment in the market. Market participants are cautious ahead of this week’s big central bank announcements and top US data releases. • JPY recovers modestly from one-week low against the USD, buoyed by expectations of a possible BoJ rate increase later in the year. • Mildly subdued USD price movement and Japan’s US trade agreement are among the factors helping the Yen recover intra-day. • Risk-on sentiment fueled by US–EU as well as US–China trade optimism caps safe-haven demand for the Yen. • Softening Tokyo inflation and Japanese political turbulence function as headwinds for JPY strength. • USD/JPY above 148.00, technicals hinting at a potential retest of 148.65–149.00 levels. • Critical support levels are at 147.65, 147.00, and 146.55, with the risk of further losses limited near 145.00. • Traders wait for updates from Fed and BoJ policy and US GDP, PCE, and NFP data to lead future direction. The Japanese Yen started the week on an upbeat note with moderate gains as market mood improved on news of a recent trade pact between Japan and the United States. This transaction revived hopes of the Bank of Japan resuming policy tightening during the latter half of this year, providing some support to the currency. However, more general market conditions are unclear, with investors weighing hope regarding global trade developments against domestic issues within Japan. Specifically, political uncertainty following a severe election setback for the ruling coalition has created skepticism regarding BoJ policy flexibility over the near term. USD/JPY DAILY PRICE CHART SOURCE: TradingView In contrast, the US Dollar approaches the week with a note of caution as the market waits for several high-impact events. Optimism surrounding the resumption of US–China talks and advancement in US–EU trade negotiations has pushed risk appetite higher, while the demand for safe-haven assets such as the Yen has fallen. Investors are in a wait-and-watch mode, waiting for significant policy announcements by the Federal Reserve and Bank of Japan, as well as a series of significant US economic data announcements that are likely to determine the direction in which the market is headed next. TECHNICAL ANALYSIS USD/JPY currency pair indicates a bullish inclination, breaking above the 200-hour Simple Moving Average (SMA) and holding on to gains beyond the 148.00 level. Bullish momentum indicators on both daily and hourly charts favor further upside potential, with the next significant resistance at the 148.65 zone, last week’s high. A clean break above this could provide the way to challenge the psychological 149.00 level. On the negative side, nearest support is around the 147.70–147.65 area, which is supported by the 100-hour SMA and the 23.6% Fibonacci retracement level, with further support around 147.00 and the 146.55 area. FORECAST If bullish pressure persists, the USD/JPY currency pair may experience further gains, particularly if the Federal Reserve remains hawkish in its policy statement or if US economic news surprises to the upside. Any sustained break above the resistance point at 148.65 would potentially lead to a new rally towards the psychological 149.00 level. Improved optimism regarding global trade, combined with stable US Treasury yields, could also continue supporting the pair higher. On the other hand, any dovish communication by the Federal Reserve or a dovish shift by the Bank of Japan would set off a pullback in USD/JPY. A fall below the crucial support area of 147.65–147.70 would expose the pair to additional drops towards 147.00 and even to the 146.55 level. A sudden decline in risk appetite or surprise weakening in future US macro data may also stimulate fresh demand for safe-haven Yen, hammering the pair down.

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Currencies USD/JPY

Japanese Yen Maintains Neutral Stand as BoJ Rate Uncertainty Combined with Increased Geopolitical Tensions

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  • June 17, 2025
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Japanese Yen (JPY) is still directionless following the Bank of Japan’s (BoJ) most recent policy announcement that left interest rates stagnant and described a gradual reduction in bond buying. The mixed signals from the BoJ, combined with uncertainty around US-Japan trade negotiations and geopolitical tensions in the Middle East, have all contributed to the neutral position in Yen. Though anticipation of an early 2026 rate hike and safe-haven flows support the currency to some extent, fading hopes for a 2025 hike and worries about surging oil prices bear down on its future prospects. The USD/JPY cross still grinds on in a consolidation mode as traders wait for more definitive signals from both central banks and global politics. KEY LOOKOUTS • There is uncertainty regarding Bank of Japan’s future action, with markets pricing in potential Q1 2026 rate hikes, though 2025 hike prospects remain muted. • Failure of Prime Minister Ishiba and President Trump’s negotiations on automobile and import tariffs may affect JPY sentiment. • Continued tensions between Israel and Iran may sustain demand for the safe-haven Yen. • Investors look for more clarity regarding the Federal Reserve’s rate-cut schedule, which will determine USD performance and the direction of the USD/JPY pair. Japanese Yen is at present going sideways amidst a messy combination of domestic and international factors, after the Bank of Japan chose to keep its policy rate steady while scaling back bond purchases. With declining chances of a 2025 interest rate hike and no resolution in US-Japan trade talks in sight, the Yen finds it hard to find traction. But still-hanging hopes of policy change in 2026 as well as rising Middle Eastern geopolitical tensions still provide some support through safe-haven buying. Traders are meanwhile on the lookout for any signals ahead from the Federal Reserve that could determine the next major move in the USD/JPY exchange. Japanese Yen remains range-bound on conflicting cues from the Bank of Japan and increased geopolitical tensions. Although safe-haven demand provides a floor, doubts over future rate increases and outstanding US-Japan trade negotiations maintain the outlook guarded. • BoJ leaves interest rates steady, with a plan to gradually taper purchases of bonds over to 2027. • Markets are skeptical of a 2025 rate increase, although expectations still exist for a potential move in early 2026. • USD/JPY is trading level, a sign of no strong directional bias in the face of conflicting fundamentals. • US-Japan trade negotiations are at a standstill, with tariff issues unresolved following the G-7 summit. • Geopolitical tensions are increasing, with the Israel-Iran conflict increasing safe-haven demand for the Yen. • Japan’s Finance Minister cautions about the weakening of the Yen and rising energy prices having negative effects on the economy. •  Investors look to Fed cues, with the USD weakened by expectations of more rate reductions in 2025. The Japanese Yen is in a phase of consolidation as the markets absorb the Bank of Japan’s recent policy move and its dovish approach towards future rate hikes. As the BoJ left interest rates unchanged, it also laid out a slowing-down of government bond purchasing that goes into 2027, which indicated that the approach to policy normalization would be slow. Governor Kazuo Ueda made it clear that the tapering of bonds was designed for curbing market volatility and was not caused by fiscal concerns. Traders are, however, split on whether the central bank will continue hiking rates in 2026, with ongoing uncertainties surrounding global trade and domestic inflation targets. USD/JPY DAILY PRICE CHART SOURCE: TradingView Internationally, tensions between Japan and the United States continue to plague sentiment with no breakthrough in the tariff talks during the G-7 summit. Prime Minister Ishiba’s efforts to scrap U.S. tariffs on Japanese cars were also met with opposition, leaving bilateral trade in an uncertain position. Moreover, geopolitical tensions have mounted through the Israel-Iran conflict, contributing to jitters in global markets. With rising energy prices and the weakening of the Yen jeopardizing Japan’s import-based economy, officials are in no mood for more turmoil. Market players are now carefully observing domestic as well as global developments for insight into the longer-term direction of the Yen. TECHNICAL ANALYSIS USD/JPY pair is consolidating against the important psychological level of 145.00, a breakdown above which is expected to validate a bullish breakout from a multi-week trading range. Momentum indicators on the daily chart are beginning to turn positive, suggesting the potential for an upward push toward the 145.45 resistance zone, followed by the 146.00 level and possibly the 146.25–146.30 region. On the downside, immediate support lies near 144.50–144.45, with a break below 144.00 exposing further downside toward 143.55 and 143.00. A decline below the mid-142.00s might precipitate a further correction, marking a restart of the wider downtrend. FORECAST Should the USD/JPY pair be able to hold out above the 145.00 psychological level, it may unlock fresh bullish pressure. A firm break above this mark may drive the pair to the next resistance at 145.45, and then towards 146.00 and the May 29 high of 146.25–146.30. The bettering momentum on technicals indicates the likelihood of an upward extension, particularly if geopolitical risk continues and the US Dollar strengthens on hawkish expectations for the Fed. Conversely, inability to remain above the 145.00 level may lead to a near-term correction. Initial support is at the 144.50–144.45 area, with firmer support at 144.00. A decisive break below this level may open the door for a deeper decline toward the 143.55 intermediate zone and the 143.00 round figure. Further downside could expose the 142.80–142.75 area and potentially the lower boundary of the consolidation range in the mid-142.00s, indicating a possible continuation of the broader bearish trend.

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