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Currencies USD/JPY

Japanese Yen Resists Trade Tensions and BoJ Rate Hike Bets; USD/JPY Fails Below 140

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  • April 22, 2025
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The Japanese Yen strengthened against the US Dollar on Tuesday, fueled by safe-haven demand due to ongoing global trade tensions and increasingly expected Bank of Japan (BoJ) interest rate hike later in 2025. The USD/JPY pair tried to bounce off levels below 140, the bullish bias on the Yen intact as geopolitical uncertainty and differential monetary policy expectations between the BoJ and the Fed continue to place pressure on the Dollar. Market sentiment was further rattled by concerns over the Fed’s independence following fresh criticism from former President Donald Trump, keeping USD gains limited. Investors now await key US economic data and global PMI releases for clearer market direction. KEY LOOKOUTS • Growing market confidence that the Bank of Japan will raise interest rates again in 2025 is expected to keep the Japanese Yen supported in the near term. • Uncertainty regarding the direction of Federal Reserve policy, stoked by political pressure and rate cut speculation in the markets, continues to influence the US Dollar. • Investors are monitoring progress in the latest US-Japan tariff negotiations, particularly comments by influential officials and possible implications for currency flows. • The Richmond Manufacturing Index and world flash PMIs should deliver new insights into economic well-being, driving near-term USD/JPY price action. Japanese Yen remains in focus as investors weigh safe-haven demand against shifting central bank policies and global trade tensions. Despite a modest intraday pullback, the Yen’s strength is underpinned by rising expectations that the Bank of Japan will raise interest rates in 2025, marking a significant divergence from the Federal Reserve’s anticipated rate-cutting path. While this, in turn, is being affected by political uncertainty in the U.S. — fueled by renewed skepticism about the independence of the Fed and continuing trade negotiations — the recovery of the Dollar remains curbed. The market now expects major U.S. economic releases and world PMI reading, which should provide clearer guidance for the USD/JPY pair in upcoming sessions. Japanese Yen remains strong as safe-haven demand and expectations of BoJ rate hikes provide support against a softer US Dollar. Uncertainty surrounding US-Japan trade talks and skepticism regarding the Fed’s policy framework remain weighing factors on sentiment. Investors now look to leading economic indicators for new direction on USD/JPY action. • The Yen remains in demand with global trade tensions and geopolitical uncertainty capping its losses versus the US Dollar. • Speculation in the markets for a Bank of Japan rate increase in 2025 is contributing to the bullishness in the Yen. • The pair rebounded more than 40 pips from around the pivotal 140.00 psychological level but failed to maintain firmness amidst bearish sentiment in the USD. • New political attacks on the Federal Reserve, such as threats against its autonomy, have maintained the Dollar on defensive levels close to multi-year lows. •  Japanese and American official quotes underpin the subtlety in current tariff negotiations, holding back investors. •  USD/JPY encounters strong resistance at 141.65-141.60 and has the vital support zones at 140.45 and 140.00. •  Upcoming events such as Richmond Manufacturing Index and global flash PMIs are to determine USD/JPY’s next decisive movement. Japanese Yen continues to find support in its safe-haven demand, with continuing global trade tensions and geopolitical risks holding investor sentiment in check. Market observers continue to be focused on the status of U.S.-Japan trade negotiations, especially after Japanese officials noted the intricacy involved in securing an agreement given touchy topics such as tariffs on autos and agriculture. As the talks proceed, the Yen will probably continue to be a favored destination for investors seeking stability amid uncertain times. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView Substantiating the Yen’s support is also the increasing market perception that the Bank of Japan might hike interest rates in 2025, a significant reversal after years of extremely accommodative monetary policy. Conversely, the U.S. Dollar is under siege as political uncertainty regarding the independence of the Federal Reserve and conflicting economic signals create doubts about the direction of U.S. monetary policy. This policy difference between the United States and Japan remains to influence currency market dynamics and reflects the cautious sentiment among traders. TECHNICAL ANALYSIS USD/JPY pair indicates signs of stabilization following a bounce back from the sub-140.00 psychological level, which has now become a significant support point. The 140.45 area, where the pair had recently established a multi-month low, is likely to provide initial downside cushioning. But the general bearish tone is still in place as far as the pair remains below the 141.60–141.65 resistance area — an important horizontal level that had served as support. A break above this region on a sustained basis may initiate a short-covering rally, paving the way for additional advances to the 142.00 and 142.35 resistance areas. To its detriment, a break below 140.45 could leave the pair vulnerable to further losses, potentially testing the yearly swing low around the 139.60–139.55 area. FORECAST USD/JPY pair is able to stay above the 140.45 support level and accumulates sufficient bullish strength, it may try to retest the immediate resistance in the 141.60–141.65 area. A decisive break and sustained strength above this area can pave the way for a short-covering rally, driving the pair towards the psychological 142.00 mark. Additional bullish extension may drive the pair to test the next major hurdle around the 142.35–142.40 area, where sellers are likely to reappear. Conversely, however, if the USD/JPY pair is unable to hold its ground above the 140.45 level, bear pressure may strengthen, pulling the pair back towards the important 140.00 psychological level. A clean break beneath this support level would most probably speed up the downside move, targeting the 2024 yearly swing low at the 139.60–139.55 region. A break below this level may warn of a deeper bear trend and possibly trigger further selling in the near term.

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Currencies USD/JPY

Japanese Yen Set for Further Upside as BoJ Rate Hike Bets Build and US-Japan Rate Differentials Narrow

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  • March 6, 2025
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The Japanese Yen (JPY) reversed its intraday declines against a faltering US Dollar (USD) and is trading close to a multi-month high, fueled by increasing bets for further interest rate increases by the Bank of Japan (BoJ). Rising JGB yields and the decreasing rate differential between the US and Japan remain supportive of the JPY. Nevertheless, fears of US tariffs on Japan, rising US Treasury yields, and positive risk sentiment in the market could cap further appreciation of the safe-haven currency. While the technical indicators hint at a bearish consolidation in the USD/JPY currency pair, traders are keeping their eyes on the US Nonfarm Payrolls (NFP) report due to be released, which may provide more guidance. A fall below the 148.00 mark is still feasible, while the 150.00 level can act as resistance to any expected bounce. KEY LOOKOUTS • The market expects further interest rate hikes by the Bank of Japan to support the JPY and tighten the US-Japan yield differential. • Future Nonfarm Payrolls (NFP) and other jobs numbers will impact USD sentiment and could guide the next significant move for USD/JPY. • Fears of additional tariffs by the US against Japanese imports could bring uncertainty and affect risk sentiment, which can influence JPY’s safe-haven demand. • USD/JPY is marked at important support around 148.00, with a breakdown lower to intensify downside potential, while resistance around 150.00 might limit rebounds. Japanese Yen (JPY) is still in the spotlight as investors watch for major economic and geopolitical drivers underpinning its direction versus the US Dollar (USD). Hopes for additional rate increases by the Bank of Japan (BoJ) still underpin the JPY, reducing the US-Japan yield gap and making the currency stronger. In the meantime, the highly anticipated US Nonfarm Payrolls (NFP) report is set to be a key driver, dictating USD sentiment and determining the next direction for the USD/JPY currency pair. Furthermore, fear of possible US tariffs on Japanese imports introduces a degree of uncertainty, which may affect risk appetite and propel demand for safe-haven currencies such as the JPY. Technically, the 148.00 support is still key, with a breach through it possibly fueling further losses, while the 150.00 psychological resistance could limit any near-term bounces. The Japanese Yen (JPY) continues to appreciate against the US Dollar (USD) on the back of BoJ rate hike expectations and a declining US-Japan yield gap. But future US Nonfarm Payrolls (NFP) figures and fears of possible US tariffs on Japan could sway market sentiment. The major technical levels of 148.00 support and 150.00 resistance will decide the next big move in USD/JPY. • Increasing speculation of additional Bank of Japan (BoJ) rate increases underpins the JPY and reduces the US-Japan interest rate spread. • The JPY is at a multi-month high against the USD, erasing intraday losses as part of the broader USD weakness. • The coming US Nonfarm Payrolls (NFP) release and other jobs data will be pivotal in guiding the direction of the USD/JPY pair. • Concerns that the US is going to impose additional tariffs on Japan introduce uncertainty and could influence market sentiment. • Higher Japanese government bond (JGB) yields and declining US Treasury yields make JPY stronger against the USD. • As much as JPY gains on safe-haven demand, rising US bond yields and positive risk tone could keep further gains in check. • USD/JPY has significant support at 148.00, while resistance around 150.00 can cap potential rallies, setting the stage for the next big move. The Japanese Yen (JPY) continues to benefit from increasing hopes that the Bank of Japan (BoJ) will continue to hike interest rates. The change in monetary policy is a testiment to Japan’s changing economic terrain, where economic stability and inflationary pressures have become central concerns. The increase in Japanese government bond (JGB) yields also indicates a shift away from the nation’s historically ultra-loose monetary policy. Consequently, investors are becoming more confident in the JPY as a solid alternative during times of global economic uncertainty. Moreover, Japan’s economic resilience and government policies to maintain growth continue to support market sentiment towards the Yen. USD/JPY Daily Price Chart Chart Source: TradingView Meanwhile, geopolitical and trade-related issues continue to be significant determinants of market conditions. The recent talks about the possibility of US tariffs on imports from Japan have generated wary mood, given that trade policy can have a broader impact on economic relations between the two countries. Market participants are keeping a close eye on events, as a change in trade relationships may affect Japan’s export-oriented economy. In the meantime, the global financial market is keenly watching major economic indicators, especially in the US, where employment figures and fiscal policies might have an impact on wider currency movements. During these events, the JPY continues to be a key factor in the forex market, a reflection of Japan’s economic prowess and policy changes. TECHNICAL ANALYSIS USD/JPY pair has been consolidating in a familiar range after a sharp drop from its yearly high around 159.00. The present price action implies a bearish consolidation phase, with momentum indicators on the daily chart remaining in negative ground but not yet triggering oversold readings. This suggests that the downtrend is likely to persist, with major support at the 148.00 level, which, if broken, could speed further losses toward the 147.35 zone. On the positive side, the 149.50-150.00 area represents instant resistance, and any movement above this can possibly lead to a short-covering rally. But overall market sentiment and technical factors will then dominate the move in the next big move in the pair. FORECAST If sentiment is changed in the direction of the US Dollar (USD), then the USD/JPY can make a northward movement if there are any positive surprises on US economic numbers, like Nonfarm Payrolls (NFP), in the near future. A good jobs report would underpin the anticipation that the Federal Reserve will remain prudent in the rate-cut stance, favoring the USD. Moreover, if the world risk appetite gets better and equity markets continue

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Currencies USD/JPY

USD/JPY Crosses 150: Japanese Yen Weakens as Policy Uncertainty and Fed Expectations Bite

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  • February 28, 2025
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The Japanese Yen (JPY) has continued to depreciate against a relatively stronger US Dollar (USD), with USD/JPY breaking above the 150.00 level as uncertainty over monetary policies grips markets. Japan’s smaller fiscal budget and falling bond yields have put additional pressure on the Yen, though hopes for additional Bank of Japan (BoJ) rate hikes could cap its decline. In the meantime, investors are waiting for the US Personal Consumption Expenditure (PCE) Price Index, which may impact the Federal Reserve’s (Fed) rate policy and decide on the next step for USD/JPY. Technically, the pair is still in consolidation mode, with major resistance at 150.30 and nearby support around 149.00. The wider picture indicates the possibility of an extension of losses, yet any upside breakout would propel the pair towards the 152.40 level, a significant 200-day Simple Moving Average (SMA) resistance. KEY LOOKOUTS • The 150.30 resistance point remains important, with a breakdown below 149.00 potentially to extend losses towards the 147.00 level. • The Japanese government’s budget reductions might act to soften the Yen, yet BoJ’s resolve to raise rates might act as long-term support. • Merchants look to the PCE Price Index for hints about the Fed’s next step, affecting USD strength and USD/JPY direction. • Risk-off sentiment can increase demand for the safe-haven Yen, slowing USD/JPY gains even as the Dollar is stronger overall. The USD/JPY currency pair is still at a critical crossroads as traders balance Japan’s fiscal reforms with the Bank of Japan’s (BoJ) possible rate hikes, in addition to waiting for major US economic releases. The budget cutting of the Japanese government and decreased bond yields have been pressuring the Yen, but hopes of more monetary tightening from the BoJ might soften its fall. On the other hand, the US Dollar is strong as it awaits the release of the Personal Consumption Expenditure (PCE) Price Index, which might shape Federal Reserve policy and determine the next direction for USD/JPY. Technical analysis points to major resistance at 150.30, with a breakaway possibly taking the pair to 152.40, while support is close at 149.00. Market sentiment, especially a move towards risk-off trades, can also influence movement of the pair in the next few sessions. The USD/JPY currency pair is trading close to the 150.00 level as Japan’s fiscal policy and BoJ’s rate hike chances are compared with US economic indicators. The US PCE Price Index to be released next will have implications for Fed policy, which may affect the Dollar’s strength and Yen’s performance. The significant resistance is 150.30, while the important support lies at 149.00. • The US Dollar gains as the Japanese Yen loses strength, taking USD/JPY higher than the psychological level. • The government spending cuts and decreased bond issuance exert pressure on the Yen, regardless of BoJ’s possible interest rate hikes. • Investors also expect additional BoJ tightening that will cap excessive Yen weakening even with weaker economic data. • The next US PCE Price Index will play a pivotal role in determining the Federal Reserve’s next step. • The crucial resistance is 150.30, while the support is 149.00, with the possibility of losses to 147.00 in case of breaching. • A risk-off sentiment may underpin the Yen as a safe-haven currency, offsetting some USD strength. • Hawkish Fed rhetoric and inflation worries imply minimal near-term rate cuts, maintaining the USD strong against the JPY. The Japanese Yen remains under pressure as market participants weigh Japan’s economic policies against global monetary trends. The latest move by the government to slash its fiscal budget and cut back on bond issuance has created alarm over economic growth and financial health. The Bank of Japan (BoJ) is, however, sticking with its gradual policy shifts, expecting interest rate rises to persist as inflation edges near the central bank’s 2% target. Even as Tokyo’s Consumer Price Index (CPI) figures slowed down, BoJ Deputy Governor Shinichi Uchida reiterated the bank’s position, laying stress on the consistent uptick in core inflation. Japan’s industrial production has, however, been in decline, reflecting economic weakness that may go on to shape policy actions in the future. USD/JPY Daily Price Chart Chart Source: TradingView On the international side, investors are watching US economic data closely, especially the upcoming Personal Consumption Expenditure (PCE) Price Index, which is the Federal Reserve’s preferred inflation metric. Recent US economic data has continued to point to persistent inflationary pressures, and it implies that the Fed will keep its restrictive policy going for a more extended period of time. Policy-makers have signaled that they will maintain interest rates firm to contain inflation, and hence there is careful market sentiment. Furthermore, worry about possible inflationary threats due to future policies of the US government provides a further source of uncertainty. With traders waiting for fresh economic reports, the general market outlook remains focused on the policies of the central banks as well as the economic performance in Japan and the US. TECHNICAL ANALYSIS USD/JPY continues in a state of consolidation, with the significant levels determining its short-term path. The currency pair has been fluctuating around the 150.00 psychological level, and the immediate resistance is located around 150.30, coinciding with the weekly high. A clean break above this might unleash additional upward momentum, and the 150.90–151.00 zone could be a possible target. To the downside, robust support is noted at 149.00, with a breakdown below this level leaving the pair vulnerable to further losses in the direction of the 148.60–148.55 area. Overall trend indicates that the pair continues in a bearish consolidation pattern after its retracement from the multi-month high of around 159.00 during the early part of the year. Oscillators on the daily chart are still in negative ground, which means that selling pressure continues, and unless there is a breakout, the overall outlook still supports a downside bias. FORECAST USD/JPY may break above the crucial resistance at 150.30, with the possibility of further increases. A long-term move above this level may lead to short-covering, pushing the pair to the 150.90–151.00

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Currencies USD/JPY

Japanese Yen Gains on Strong GDP Data, Puts Pressure on USD/JPY Near One-Week Low

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  • February 17, 2025
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The Japanese Yen (JPY) continues to hold strong gains after a strong Q4 GDP report supported expectations of more interest rate increases by the Bank of Japan (BoJ). Narrowing US-Japan rate difference, combined with persistent weakness of the US Dollar (USD) amid disappointing US retail sales and market skepticism around Trump’s offered reciprocal tariffs, holds the USD/JPY pair close to a one-week low. Owing to hawkishness offered by the Federal Reserve, offering some support for the USD notwithstanding, the functional bias remains skewed towards JPY bulls, making a further lower direction for the currency pair quite likely. Support levels are key around 151.40 and 150.00, with any bounce being met with resistance at 152.70 and higher.  KEY LOOKOUTS • Solid Q4 GDP growth of 2.8% supports the view that the Bank of Japan will keep tightening monetary policy. • A soft US Retail Sales report and worries over Trump’s retaliatory tariffs keep the USD at a two-month low, bearing down on the USD/JPY pair. • The diminishing gap between US and Japanese interest rates strengthens the Yen, increasing investor confidence in Japan’s currency amid BoJ’s hawkish stance. • USD/JPY faces immediate support near 151.40, with further downside potential toward 150.00, while resistance lies at 152.70 and 154.00. The Japanese Yen continues to strengthen as robust Q4 GDP data reinforces expectations of further interest rate hikes by the Bank of Japan (BoJ). The decline in the US-Japan rate differential and continued US Dollar softness, fueled by soft US Retail Sales data and reservations regarding Trump’s proposed tit-for-tat tariffs, maintain the USD/JPY cross close to a one-week low. Although the Federal Reserve’s hard-dollar bias lends some support to the USD, overall sentiment remains in favor of JPY bulls. Critical support for the duo comes around the 151.40 and 150.00 points, whereas any bounce could see stiff resistance near 152.70 and 154.00. The Japanese Yen is still strong following positive Q4 GDP numbers, further solidifying BoJ rate hike expectations and putting pressure on USD/JPY around a one-week low. Poor US Retail Sales and Trump’s reciprocal tariffs worries also bear down further on the USD, as key support and resistance levels at 151.40 and 152.70, respectively. • Japan’s Q4 GDP increased by 2.8%, further solidifying hopes for additional Bank of Japan (BoJ) rate hikes. • The Japanese Yen holds its ground, driving the USD/JPY pair down as the US Dollar weakens. • A steep 0.9% decline in US retail sales puts further pressure on the USD, dampening investor sentiment. • Uncertainty in the markets regarding Trump’s tariffs plans on US imports is adding to USD weakness and JPY strength. • A narrowing gap between US and Japanese interest rates is further adding to the bullish momentum of the Yen. • USD/JPY is supported close to 151.40 and 150.00, but resistance is found at 152.70 and 154.00. • The USD gets some support from the Fed’s determination to hold rates higher, capping USD/JPY losses deeper than this. The Japanese Yen keeps gaining strength with Japan’s 2.8% Q4 GDP growth increasing hopes of higher rate hikes from the Bank of Japan (BoJ). The constricting US-Japan rate gap, coupled with soft US economic indicators, has held the USD/JPY pair close to a one-week low. The US Dollar is still under the gun after the sudden 0.9% fall in US retail sales to signal weakening consumer expenditures. Moreover, uncertainty surrounding former President Donald Trump’s so-called reciprocal tariffs has contributed to market uncertainty, which has dampened the USD further. Investors currently expect a stronger Yen in the short term, with major support levels at 151.40 and 150.00. USD/JPY Daily Price Chart TradingView Prepared by ELLYANA Even though the USD is weak, the Federal Reserve’s aggressive stance on interest rates serves as a counterbalance, stopping further losses in the USD/JPY pair. The Fed’s hesitation to reduce rates in the near future gives some relief to the USD, but its upside is still limited by prevailing sentiment. The USD/JPY technical levels are being watched closely by traders, with resistance at 152.70 and 154.00, which would see a short-covering rally if broken. Still, with the BoJ tightening measures and a closing rate gap, the bullish momentum in the Yen is set to continue, placing pressure on the currency pair during the next few sessions. TECHNICAL ANALYSIS USD/JPY currency pair is trading close to significant support levels at 151.40, with further downside risk towards the psychological 150.00 level. Daily chart oscillators are still in bearish territory, and the decreasing US-Japan rate gap continues to support the Yen. A slide below 150.90 could further enhance selling pressure, driving the pair towards the 149.60-149.55 range and possibly testing the 149.00 support. On the higher side, any bounce might find stiff resistance at 152.70, which coincides with the 200-day Simple Moving Average (SMA). A breakout above 153.15 (100-day SMA) may result in a short-covering rally, pushing the pair to 154.00 and the 154.75-154.80 supply area. But since fundamentals favor the Yen, the overall trend will remain bearish unless USD bulls take charge again. FORECAST USD/JPY pair can recover if some conditions are met. A breach above the 152.00 level may propel the pair towards the robust resistance level of 152.70, where the 200-day Simple Moving Average (SMA) is located. A firm breakout above this level might lead to a short-covering rally, driving the pair towards the 153.15 region (100-day SMA). If bullish pressure intensifies, the subsequent target is around the 154.00 psychological level, then the 154.45-154.50 supply zone. Another push higher might have the pair retracing last week’s high in the vicinity of the 154.75-154.80 area, if the US Dollar regains power on the back of aggressive Federal Reserve policy or improved risk appetite for global markets. USD/JPY remains below 152.00, with near-term support around 151.40-151.45. A break below here might trigger selling pressure faster, taking the pair down to 150.90, which is the lowest level since December 10. Further falls might test the psychological 150.00, with longer losses making the descent towards the support

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Currencies USD/JPY

USD/JPY Consolidates Amid Trade War Fears and BoJ Rate Hike Speculations

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  • February 11, 2025
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The USD/JPY currency pair remains in a consolidative phase around the 152.00 mark due to conflicting factors that are currently influencing market sentiment. On the one hand, US President Donald Trump’s new tariffs on steel and aluminum imports have reignited global trade war fears, thereby boosting the safe-haven appeal of the Japanese Yen. On the flip side, expectations of a delay by the Federal Reserve in terms of rate cuts amidst inflationary pressures are buoying the US Dollar. On the other hand, increasing speculations that the Bank of Japan (BoJ) will raise interest rates further are bolstering the Yen but are offset by concerns of instability in Japan’s economy due to Donald Trump’s policies. From a technical standpoint, the pair faces resistance at 152.50, with a downside bias suggesting potential declines toward the 151.00-150.90 zone if selling pressure intensifies. However, a breakout above 152.50 could pave the way for further gains toward 153.00 and beyond. Traders now await Fed Chair Jerome Powell’s testimony and US inflation data for clearer direction. KEY LOOKOUTS • The new 25% tariffs on steel and aluminum imports will likely disrupt global trade, enhancing the safe-haven appeal of JPY and raising concerns about the stability of Japan’s economy. • As inflation remains above the 2% target, growing expectations of further interest rate hikes by the Bank of Japan may strengthen the Yen. • The Federal Reserve’s decision on rate cuts, which is largely dependent on Powell’s testimony and US inflation figures, will be crucial in determining the next move of USD/JPY. The USD/JPY pair is at a critical juncture as multiple factors shape its trajectory. Recent US tariffs under Donald Trump have only added fuel to concerns of a global trade war, making the Japanese Yen a safe haven currency while sowing uncertainty over the stability of Japan’s economy. Meanwhile, speculations about additional interest rate hikes from the Bank of Japan continue to be positive for the Yen as inflation remains higher than the 2 percent target of the central bank. Meanwhile, any signals from Fed Chairman Jerome Powell or upcoming data that could either accelerate or restrain monetary policy should propel the course in the USD currency. It looks like resistance and support of key levels appear below at around 152.50. Thus a sustained pull from the inside bar zone may turn out towards significant further deterioration at 151.00 – 150.90. Of late, markets continue to keep themselves busy focusing keenly over future economic events of the economic states. USD/JPY still trades in the range, though, with fresh tariffs by Trump fueling fear of a full-blown trade war that strengthens the Yen. Uncertainty in Fed rate cut also helps support the USD. BoJ’s potential rate hike further impacts the sentiment. 152.50 resistance and 151.00-150.90 support form the pair’s next direction of movement. Further direction would now be sought on Powell’s testimony and US inflation data. • The imposition of 25% tariffs on steel and aluminum imports by President Trump increases global trade tensions, enhancing the safe-haven appeal of the Japanese Yen. • Inflation above the 2% target would further encourage the Bank of Japan to increase interest rates, supporting the JPY. • Market attention is focused on Fed Chair Jerome Powell’s testimony and US inflation data, which will help decide the central bank’s next monetary policy move. • The US Dollar is buoyed by growing hopes that the Fed will postpone the rate cuts, as economic and labor market conditions are surprisingly robust. • USD/JPY has hit a significant resistance zone at 152.50 where the 100- and 200-day SMAs are located. • If the pair falls below this crucial support zone, it will create further selling momentum to the psychological 150.00 mark. • Traders remain vigilant in the days ahead as geopolitics, inflation figures, and the decisions of the central banks influence the USD/JPY direction. USD/JPY is still trading in a consolidation mode due to the uncertainty surrounding the global economy and the decisions of the central banks. Recent 25% tariffs announced by US President Donald Trump on imports of steel and aluminum have resurfaced fears of a trade war, making the safe haven Japanese Yen an attractive bet for traders. However, the possibility of retaliatory measures and disruption in trade agreements against Japan’s economy has kept further JPY gains at bay. Meanwhile, expectations of more rate hikes by the BoJ continue to be supportive of the Yen, with policymakers indicating that the increase might reach 1% by the second half of the fiscal year. USD/JPY Daily Chart TradingView Prepared by ELLYANA It will be hard for the BoJ to avoid hiking the rate further, given that inflation in Japan is consistently above the central bank’s 2% target. On the other hand, the US Dollar remains strong as market players anticipate the Federal Reserve may delay lowering interest rates due to concerns of sustained inflation. Investors will be on the lookout for the congressional testimony by Fed Chair Jerome Powell and US consumer inflation figures released shortly, which would shed light on the central bank’s intentions. TECHNICAL ANALYSIS USD/JPY pair is consolidating near the 152.00 level, facing strong resistance at 152.50, where the 100-day and 200-day Simple Moving Averages (SMAs) converge. A decisive break above this key level could trigger a short-covering rally, pushing the pair towards the 153.00 psychological mark, with the next resistance around 153.75. On the downside, immediate support is seen at the 151.30 level, followed by the 151.00-150.90 zone, which has acted as a strong base in recent sessions. A sustained move below this range could accelerate the bearish momentum, exposing the pair to further declines toward the 150.55 intermediate support and the crucial 150.00 psychological level. Besides that, oscillators on the daily chart are in negative territory but have not entered the oversold zone, and thus selling pressure might continue unless a strong bullish catalyst appears. FORECAST The USD/JPY currency pair might be on the path for a bullish breakout if it succeeds in sustaining its move above the

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Currencies USD/JPY

Japanese Yen Rises on BoJ Rate Hike Bets: Can USD/JPY Hold Above 153.00?

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  • February 5, 2025
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The Japanese Yen (JPY) remains bullish against the US Dollar (USD), having touched a one-month high due to increasing prospects of a rate hike by the Bank of Japan (BoJ). Strong growth in real wages and picking up the pace of inflation in Japan argue for more monetary tightening than possible rate cuts from the Federal Reserve due to slowing US job market data. Therefore, the divergence of policy outlook reduces the Japan-US rate differential, enhancing demand for the JPY. However, risk-on sentiment and the potential for US tariffs on Japan in its imports curtail further upside. Traders have now pivoted to the US ADP report and ISM Services PMI for intraday market guidance, and USD/JPY is due to challenge the 153.00 level and key technical supports. KEY LOOKOUTS • Stretched real wages and inflation in Japan strengthens prospects for additional BoJ rate increases, underpinning the Japanese Yen against the US Dollar. • A weakening US job market increases the likelihood of Fed rate cuts, which will further narrow the Japan-US rate gap and put pressure on the USD/JPY pair. • Investors are cautious as potential US trade tariffs on Japan may affect economic relations, adding uncertainty to JPY’s bullish momentum. • The USD/JPY pair is capped at 154.00, and a break below 153.00 may lead to further downside, testing the 100-day SMA near 152.45. The Japanese Yen managed to remain strong against the US Dollar even as expectations for a Bank of Japan rate hike continue, found being supported by rising real wages and inflation. However, weakening US job market data fuels speculation of Federal Reserve rate cuts and tightens the Japan-US rate differential, adding further downward pressure on USD/JPY. However, it remains capped by risk-on sentiment and concerns over potential US trade tariffs on Japan. At these levels, with the pair toying with 153.00, traders are being cautious, and now market participants are looking for key US economic data – first, the ADP report followed by ISM Services PMI, to give them further direction. The Japanese Yen is still gaining on the US Dollar due to BoJ rate hike expectations and the narrowing Japan-US rate differential. However, risk-on sentiment and potential US trade tariffs on Japan limit further gains. Traders now focus on key US economic data for short-term direction. • Rising real wages and inflation in Japan strengthen the case for further monetary tightening, boosting the Japanese Yen. • Poor US job data raises the prospect of cuts in Federal Reserve rates, narrowing the Japan-US rate differential and putting pressure on the USD. • The pair is trading at the 153.00 handle, and a break below could send it to the 100-day SMA around 152.45. • Market optimism about trade negotiations between the US, Canada, and Mexico limits the safe-haven appeal of the Yen. • Investors remain cautious as Japan is likely to be a part of US tariffs, which may affect the economic relationship and market sentiment. • Traders will look for the ADP employment report and ISM Services PMI for short-term guidance in the USD/JPY pair. • On the upside, immediate resistance lies at 154.00. Further upside would face resistance at 154.75 and 155.25. The level of 153.00 acts as a strong support. The Japanese Yen (JPY) maintains its bullish stance against the US Dollar (USD), driven by growing expectations of a Bank of Japan (BoJ) rate hike. Recent data showing a rise in Japan’s real wages and accelerating inflation reinforce the case for further monetary tightening, supporting the Yen’s appreciation. To date, weakening US job market data, including this week’s dismal JOLTS report, that fuels speculation the Federal Reserve would cut rates and that the two central banks pursue different policy stances, in a way cuts the Japan-US rate differential down, making JPY more interesting and weighing upon the USD/JPY which now hovers near the major 153.00 level. USD/JPY Daily Price Chart TradingView Prepared by ELLYANA Despite the JPY’s strength, risk-on sentiment and worries over potential US trade tariffs on Japan prevent a stronger rally. Investors are careful because US President Donald Trump’s tariff policies can eventually target Japan, given the latter’s significant trade surplus with the US. Moreover, the potential trade breakthrough between the US, Canada, and Mexico has eased trade war concerns, and this has further reduced safe-haven demand for the Yen. Traders now look to additional key US data such as ADP employment and ISM Services PMI for further market directions. Technical, a break below 153.00 level would push USD/JPY closer to the area of the 100-day Simple Moving Average (SMA) at 152.45, while resistance is still the 154.00 level, with higher areas of resistance quoted at the 154.75 and 155.25. TECHNICAL ANALYSIS The USD/JPY pair continues to trade under considerable bearish pressure, trading just above the key 153.00 level. A strong breakdown below this level will lead to additional downward momentum to the 100-day Simple Moving Average near 152.45, and enhance the bearish sentiment. Daily chart oscillators are turning south but still lack overbought readings, thus allowing for some additional losses. The nearest strength will be around the psychological barrier of 154.00. Beyond this lies a pair of obstacles at 154.75 and 155.25. A continuation move above these levels could invalidate the bearish scenario and shift short-term direction toward buyers, likely targeting the 155.50-156.00 zone. FORECAST Even though there is some short-term bearish momentum, there are some very important resistance zones that can initiate a short-term rebound if violated. The major resistance level can be found around the psychological area of 154.00. A sustained move above this level could fuel a short-covering rally, driving the pair towards the 154.75-155.00 region. Further bullish momentum could drive the pair to challenge the 155.25-155.30 resistance zone, a crucial pivot point that, if decisively broken, could shift the near-term trend in favor of buyers. Beyond this level, the next upside target would be the 156.00 region, provided market sentiment supports a stronger USD recovery. Expectations of further Bank of Japan (BoJ) tightening remain

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Currencies USD/JPY

Japanese Yen Holds Steady Against USD on BoJ Rate Hike Bets and Fed Policy Expectation

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  • January 29, 2025
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The Japanese Yen (JPY) maintains the intraday gains against the US Dollar (USD) as investors await the policy decision of the Federal Reserve (Fed). Support for the JPY comes from expectations of further interest rate hikes by the Bank of Japan (BoJ) and a narrowing US-Japan yield differential driven by declining US Treasury bond yields. Meanwhile, worries over US President Donald Trump’s trade policies and a positive risk sentiment may cap JPY’s upside. Market participants expect a dovish Fed stance, with the possibility of rate cuts later in the year. The USD/JPY pair faces key resistance near 156.60-156.70, while the 155.00 psychological level serves as immediate downside support. The event from the Fed will probably drive USDJPY’s direction in the short run. KEY LOOKOUTS • USD/JPY will remain capped due to further monetary policy tightening at hand at the Bank of Japan. • Investors await the result of the Federal Reserve’s two-day meeting that should highly determine price action for the USD and, therefore, the moves for USD/JPY. • Softening US Treasury yields continue to compress the yield gap, making the lower-yielding Yen more favorable and capping on USD gains. • Fresh tariff threats by Donald Trump are likely to lift inflation concerns that impact Fed rate expectations, creating volatility in currency markets. Japanese Yen remains firm against the US Dollar as trading attention shifts to key economic events and policy decisions. Market players are expecting the BoJ to hike the rates further. The wage negotiation is strong and monetary policy adjustment is cautious. The Federal Reserve’s two-day meeting is highly awaited since the expectations of a possible rate cut later this year are influencing USD dynamics. Besides, the yield differential between the US and Japan has narrowed further due to the decrease in US Treasury yields, strengthening the Yen. However, concerns over US President Donald Trump’s proposed tariffs and their inflationary impact could inject volatility into the USD/JPY pair, making the Fed’s stance a crucial factor in the currency’s near-term direction. The Japanese Yen holds its ground against the US Dollar amid BoJ rate hike expectations and a narrowing US-Japan yield differential. Traders await the Fed’s policy decision, which could shape USD/JPY’s direction. Meanwhile, Trump’s trade policies add uncertainty, influencing market sentiment and currency volatility. • Traders anticipate further interest rate hikes from the Bank of Japan, supporting the Yen. • The outcome of the Federal Reserve’s meeting will be very crucial for the movement of USD/JPY. • The decline in US Treasury yields has narrowed the gap, and the lower-yielding Yen is in favor. • Market participants believe that the Fed will cut borrowing costs twice before the end of the year. • Fresh tariff threats on key imports could impact inflation and USD strength. • Resistance for USD/JPY is seen near 156.60-156.70, and further upside is capped at 157.45-158.00. • The psychological level at 155.00 is acting as support and then 154.50 and 153.70. The Japanese Yen is gaining ground against the US Dollar as traders are positioning ahead of the Federal Reserve’s policy decision. Expectations of further interest rate hikes by the Bank of Japan (BoJ), due to strong wage growth and cautious monetary adjustments, have strengthened the Yen. The decline in US Treasury bond yields has also brought the US-Japan yield differential closer, making the lower-yielding JPY more appealing to investors. However, risk-on sentiment in global markets and traders’ aversion to making aggressive bets before the FOMC meeting have capped further gains for the Yen. USD/JPY Daily Chart TradingView Prepared by ELLYANA Meanwhile, the US Dollar remains pressured due to growing speculation that the Federal Reserve is going to be dovish and cut rates further later in the year. US President Donald Trump’s tariff threats on computer chips, pharmaceuticals, and metals in recent weeks also add market uncertainty as that threatens to potentially inject inflation into the economy. The USD/JPY pair is currently ranging near the 155.00 psychological level, with some resistance near 156.60-156.70 and further upside potential capped at 157.45-158.00. The key supports at 154.50 and 153.70 will come into play if bearish momentum increases. Traders are now awaiting the Fed’s decision, which will significantly decide the further move for the USD/JPY pair. TECHNICAL ANALYSIS Technically, the USD/JPY pair has broken below a multi-month ascending channel, favoring a bearish outlook. The 155.00 psychological mark is immediate support, followed by key levels at 154.50 and 153.70. A sustained break below these zones could accelerate the downside move toward the 153.30 and 153.00 levels. On the upside, resistance is seen at 156.60-156.70, with further selling pressure expected near 157.45. A breakout above 157.00 may lead to a short-covering rally to take the pair as high as 158.00 and the multi-month top of 158.85-158.90. In addition, the daily chart is showing slightly negative oscillators; thus, until the Fed’s decision alters the trend in the markets, the trend might continue its downward trajectory. FORECAST If the Fed decides to raise its interest rates or indicates an extended period for cutting rates, then the USD/JPY can once again experience an upward swing. A break above the resistance zone of 156.60-156.70 may trigger a short-covering affair, with the buyers targeting the 157.45 level. Further bullish momentum is seen taking this pair toward 158.00, and sustained may retest the multi-month high of 158.85-158.90. However, for an extended rally, strong economic data from the US and rising Treasury yields would be necessary to attract fresh buying interest in the USD. On the flip side, if the Federal Reserve indicates a dovish policy shift or focuses on possible rate cuts, the US Dollar may weaken, and this would push USD/JPY down. A convincing break below the 155.00 psychological mark may reveal the 154.50-154.55 support area. More downside force may accelerate the fall to 153.70, with a deeper fall focusing on 153.30 and 153.00. Stronger expectations of BoJ rate hikes, with narrowing US-Japan yield differentials, should keep the Yen supported, supporting a bearish view for the USD/JPY pair.

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Currencies USD/JPY

US Inflation Data and BoJ Policy Expectations Drive Outlook for USD/JPY

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  • January 16, 2025
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Over the last several days, the Japanese Yen had been picking up pace on positive news in form of building the expectations for next week’s interest rate hike from the Bank of Japan and strengthening inflationary tendencies in the economy of Japan, thus pushing JGB yields relatively closer to yields of US treasury bonds, an indicator in the favor of Yen. However, the USD/JPY pair continues to be strong, trading above the 156.00 mark, supported by a mild increase in the US Dollar and calming market fears over US President-elect Donald Trump’s trade tariffs. The latest US inflation data have helped shift the expectations for Federal Reserve policy and have been a source of strength for the Greenback. As the USD/JPY pair will likely be sensitive to key US macro data and the BoJ’s policy decision, the price will likely remain quite volatile with significant support at 155.00 and resistance at 156.35. KEY LOOKOUTS • Follow any news and updates on the Bank of Japan’s rate hike decision as this will significantly influence JPY strength and the USD/JPY movement. • Pay attention to US inflation report surprises, where less-than-expected inflation data can easily weigh down on Fed tightening expectations and dynamics of USD/JPY. • Track changes in the US-Japan yield differential: any signs of narrowing of this differential would further support the Japanese Yen, potentially limiting upside of USD/JPY. • Be aware of overall market sentiment since a risk-on or risk-off mood swing could change the demand for safe-haven assets, such as JPY, and subsequently influence USD/JPY price action. As long as the USD/JPY remains above the mark of 156.00, there are several important factors that would shape its future. First, the anticipation from the Bank of Japan’s decision regarding an interest rate increase will be the key, as any signalling towards tighter monetary policy would further strengthen the Japanese Yen. The second factor will be US inflation data, where softer-than-anticipated results might limit the Federal Reserve’s tightening moves, which could weaken the US Dollar. The narrowing US-Japan yield differential, which is being driven by rising Japanese bond yields, could continue to support the Yen. Lastly, market sentiment will be a significant factor; risk-on or risk-off moods will influence the demand for safe-haven assets like the Yen. Traders will have to watch these developments closely to gauge the future direction of USD/JPY. Key things to monitor in USD/JPY are the BoJ’s rate hike decision, US inflation data, the yield differential, and shifting market sentiment affecting risk appetite. • Growing bets for a rate hike by the Bank of Japan next week are supporting the Japanese Yen and influencing USD/JPY movements. • Rising inflation in Japan strengthens expectations for further BoJ tightening, pushing yields on Japanese Government Bonds (JGBs) to multi-year highs. • Softer-than-expected US inflation data has fueled speculation that the Federal Reserve may pause or slow down its rate hikes, impacting the USD. • The US-Japan yield differential has been narrowing, with US Treasury bond yields retreating and JGB yields rising, which supports the Yen. • Easing concerns about US trade policies and a positive risk-on mood are reducing demand for traditional safe-haven assets like the JPY. • The USD/JPY pair has a resistance area near 156.00 and possible support near the psychological level of 155.00 and may even continue lower to 154.50. • Traders are looking forward to the US macroeconomic data that may bring some hints regarding the Fed’s monetary policy, which can help decide the way for USD/JPY. The Japanese Yen has gained recently as expectations for the BoJ’s rate hike in its upcoming meeting are rising. The Japanese economy is also experiencing rising inflationary pressures. Markets are increasing bets on the further tightening of monetary policy. That has pushed the yields on JGBs to multi-year highs. In conjunction with a narrower US-Japan yield differential, that has supported the Yen. The softer-than-expected US inflation data has prompted traders to trim expectations for aggressive rate hikes by the Federal Reserve, which in turn has resulted in a small recovery for the US Dollar. Despite this, the USD/JPY pair remains capped below key resistance levels, with a psychological barrier at 156.00 and potential support near the 155.00 mark. As markets await the Bank of Japan’s policy decision and key US macroeconomic data, attention will be focused on how these developments influence the USD/JPY outlook. Narrow yield differential between US and Japanese bonds will continue to support the Yen, while a change in US inflation expectations would either dampen or boost USD demand. Of course, market sentiment is crucial; improving risk appetite and reducing trade concerns are reducing demand for traditional safe-haven assets, such as the JPY. Traders should pay close attention to these dynamics, as they may present the next important move of the USD/JPY pair; further breakdowns to 154.50 are possible if support levels are breached. TECHNICAL ANALYSIS Resistance areas for the USD/JPY remain around the 156.00 level, which has turned out to be one of the critical barriers during the past few sessions. If the pair can break above this level, then the next resistance zones are between 156.35 and 156.75, with further upside potential toward the 157.00 mark. On the downside, the psychological support at 155.00 is crucial, and a break below this level could open the door for a deeper pullback toward the 154.50 region. A move below 154.50 would likely be driven to the 153.40-153.35 area, where the pair may find support, potentially serving as the lower end of a four-month upward-sloping channel. The current technical outlook suggests that any sustained momentum above or below these key levels will determine the near-term direction for USD/JPY. USD/JPY Daily Price Chart Sources: TradingView, Prepared by ELLYANA FORECAST A push above the immediate resistance at the 156.00 level should send the pair towards the 156.35-156.45 zone, while a more significant break-out should push it above this zone toward 156.75 and maybe to the top at 157.00. Stronger and continuous bullishness will finally break into the

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