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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

USD/JPY Falls Below 142.50 as Japanese Inflation Remains Strong and US Data Provides Mixed Signals

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  • April 18, 2025
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The USD/JPY currency pair fell below the 142.50 level in Friday’s early Asian session, as the Yen was strengthened by higher-than-anticipated Japanese inflation data. Japan’s Consumer Price Index (CPI) increased 3.6% from year earlier in March, with core CPI rising to 3.2%, meeting market forecasts but supporting the Bank of Japan’s conservative view on policy tightening in the context of external uncertainties, including U.S. tariffs. In contrast, the U.S. dollar fared poorly even as Initial Jobless Claims decreased to a two-month low, as weaker manufacturing data from the Philadelphia Fed Index triggered worries over economic momentum. The blend of resilient Japanese inflation and conflicting U.S. data held the Yen strong, though possible upside is still constrained by cautious central bank cues. KEY LOOKOUTS • Japan’s March CPI data revealed ongoing price pressures, supporting the Yen and questioning the Bank of Japan’s next policy steps. • Even with robust inflation numbers, BoJ authorities, including Governor Ueda, are hesitant to increase rates further, highlighting that uncertainties must be watched, particularly those related to U.S. tariff movements. • Although U.S. Initial Jobless Claims fell to a two-month low, indicating the labor market’s stability, the Philadelphia Fed Index fell short of expectations, which suggested manufacturing weakness. • Markets are keeping close eyes on ongoing trade talks between Japan and the U.S., which may continue to impact currency trends as tensions escalate in global trade. The USD/JPY pair comes under renewed stress with Japan’s March inflation readings highlighting ongoing price growth, lending strength to projections of a dovish but firm economic scenario. Though the stronger CPI readings had earlier boosted the Yen, cues from the Bank of Japan indicating patience regarding coming rate hikes have subdued bullish exuberance. Meanwhile, confusing U.S. economic signals — with unemployment claims falling to a two-month low and manufacturing figures coming in weaker than expected — have kept the U.S. dollar on the defensive. The continuing trade talks between Japan and the U.S. will most probably continue to be a priority for investors, as policy and global trade risks continue to influence market mood in the next few sessions. USD/JPY pair fell under 142.50 following strong Japan’s March inflation that drove up the Yen. Still, BoJ’s dovish position regarding interest hikes and on-going U.S.-Japan trade discussions will act as a deterrent against further gains of JPY. Hesitant U.S. data further exacerbated the weakness in the Dollar earlier in the day in Asian time. • USD/JPY fell under 142.50 in early Asia trading Friday due to better-than-expected Japanese inflation numbers. •  Japan’s March CPI increased 3.6% YoY, down modestly from 3.7% earlier but still showing sustained price firmness. • Core CPI (excluding fresh food) rose to 3.2%, in line with expectations and showing stable underlying inflation. •  BoJ officials indicated restraint on rate hikes, pointing to overseas uncertainties, particularly over U.S. tariff policies. •  The U.S. Initial Jobless Claims declined to a two-month low, showing sustained labor market robustness. •  Philadelphia Fed Index decreased, falling below expectations and prompting worries about the health of U.S. manufacturing. •  Market attention centers on Japan-U.S. trade negotiations, which may determine direction of currencies and markets in the future amidst tariff tensions. Japan’s recent inflation figures showed that consumer prices were still high in March, as the National Consumer Price Index (CPI) increased 3.6% from one year ago. Core inflation, which excludes fresh food, came in at 3.2%, matching market expectations and suggesting steady price growth despite a slight cooling from previous months. The data reflects the ongoing impact of cost pressures on the Japanese economy, while policymakers at the Bank of Japan continue to approach future rate decisions with caution, citing global uncertainties, including the effects of U.S. tariff policies. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView At the same time, American economic indicators offered a mixed view. Initial Jobless Claims decreased to their two-month lowest level, reflecting a robust labor market. Yet the Philadelphia Fed Index of regional manufacturing activity lagged expectations and caused worries for the health of the manufacturing sector. Investors also monitor the developments of Japan-U.S. trade talks, as negotiations on tariffs and economic cooperation are ongoing between the highest authorities from both nations. TECHNICAL ANALYSIS USD/JPY pair is demonstrating bearish strength after breaking down below the 142.50 support level, which points to further declines if the sellers hold on to power. The pair is oscillating around the 142.20–142.25 zone, which has become an immediate support, and any attempts to bounce back might get resistance at around the 142.80–143.00 zone. The Relative Strength Index (RSI) on the lower timeframes indicates a weak oversold condition, pointing toward the likelihood of a short-term corrective bounce or consolidation preceding the next direction. Market participants will carefully observe price action around these crucial levels for additional indications. FORECAST USD/JPY pair is able to remain above the 142.20 support level and attracts some demand, it may try to stage a recovery towards the 142.80–143.00 resistance area. A continued breakout above here could pave the way for more upside, particularly if U.S. economic statistics surprise on the upside or if risk appetite picks up in international markets. Second, any hint of policy divergence among the Federal Reserve and the Bank of Japan — while the Fed remains resolute on interest rates — could also give a boost to a stronger Dollar in the short term. On the downside, if USD/JPY breaks and settles below the 142.20 support level, it could trigger fresh selling pressure, leading the pair toward the next support around the 141.50 region. Continued strength in Japanese inflation, combined with global trade tensions and weaker U.S. manufacturing indicators, could weigh further on the pair. In this scenario, sellers might target lower levels as investor sentiment leans toward safe-haven assets like the Japanese Yen.

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Currencies USD/JPY

USD/JPY Outlook: Slowing Downside Momentum, Rangebound Trading Ahead of 145.40–148.50

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  • April 10, 2025
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The USD/JPY currency pair is stabilizing after sharp recent moves, and analysts at UOB Group believe that downside momentum is starting to slow. Although the US Dollar temporarily slipped to 143.98, it then recovered sharply, showing conflicting short-term signals. Until now, the USD should trade between 145.40 and 148.50. A decisive move above the 148.50 resistance level would indicate that the recent Dollar weakness has probably run its course. But until then, there is still a low probability of a retest of the 144.00 level in the near term. KEY LOOKOUTS •  USD/JPY should trade between 145.40 and 148.50 in the near term, indicating a phase of consolidation following recent volatility. •  A persistent break above 148.50 would indicate that recent bear pressure on the USD has probably bottomed, with the outlook now assuming a more neutral or bullish character. •  As momentum lower tapers out, there is still a low probability of USD returning to the 144.00 level before a more definite rebound. •  After the sharp decline and strong recovery, the market is still unsure; traders need to look for direction confirmation before they take positions. After recent fluctuations in the USD/JPY currency pair, traders need to pay close attention to a few important levels and signals. The currency will continue to be range-bound between 145.40 and 148.50 in the short run, indicating a consolidation period. A breakout above the 148.50 resistance level would indicate that the recent bear pressure on the US Dollar has bottomed out, and the door could be open for further advances. Yet, with momentum still in doubt, there is still a low risk of the pair retesting the 144.00 support level before any meaningful recovery. Traders should wait for definitive directional signals before entering new positions. USD/JPY will trade between 145.40 and 148.50 as bearish momentum starts to decline. A breakout above 148.50 will indicate stabilization of the USD, while a slide towards 144.00 is still a short-term risk. • USD/JPY will trade between 145.40 and 148.50 short term. • Recent price movement indicates bear pressure on USD is beginning to weaken. • Major support is at the 145.00 level, and a short-lived drop to 143.98 was recently witnessed. • Major resistance is at 148.50; a breakout above it would mark trend change. • Gaudy swings render the immediate trend uncertain, suggesting consolidation. • A small possibility is still there for USD to test the 144.00 level again before consolidating. • Traders must hold back for a firm move above or below major levels for clearer guidance. USD/JPY currency pair is at the moment going through a period of turmoil, with investors and market players closely monitoring for hints of stability. However, after a period of wild fluctuations, sentiment seems to be swinging in a different direction, and attention is turning on whether volatility witnessed in recent times will make way for more stable trading conditions. According to analysts, the wild fluctuations are likely to start subsiding, making it a more predictable market for both traders and investors. USD/JPY DAILY PRICE CHART CHART SOURCE: TradingView In the larger picture, this progress is a reflective response in the currency market from players reacting to a combination of economic indicators and international influences. Though the ultimate direction is not yet certain, the immediate focus is on regaining equilibrium and waiting for stronger signals. This point is one of opportunity for the market to re-evaluate and re-coalesce, and to lay the groundwork for the next phase of action with enhanced clarity and determination. TECHNICAL ANALYSIS USD/JPY has exhibited signs of consolidation following a sharp period of volatility, as price action stabilized around major levels. The pair recently bounced from a low at around 144.00 and hit resistance at around 148.50, which suggests a likelihood of a change in momentum. Although short-term indicators portray a mixed picture, the slowing of downward momentum indicates a likely buildup for a breakout. A break and hold above 148.50 would seal the trend stabilization deal, but losing the levels of 145.40 might sustain the pair within a consolidatory mode. Players are following the levels very intently for direction. FORECAST USD/JPY may break above the resistance level of 148.50, indicating a possible change to a more stable or rising trend. A definitive move beyond this level may set the stage for 149.50 and higher, as buyers come in with increased confidence. This would indicate that recent US Dollar weakness has probably bottomed out, and the stage is set for a modest recovery against the Yen in the short to medium term. On the negative, if USD/JPY does not hold support at 145.40, the pair would be subjected to fresh selling pressure. A slide below 145.00 may see a test of the new low around 144.00, and fresh weakness could target deeper support areas. Although declining momentum is fazing out at the moment, any renewed bearish sentiment or unforeseen economic news may continue to push the pair down, prolonging the corrective cycle.

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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

Cautious Yen Rally: BoJ Hike Bets and Falling Back JGB Yields Keep USD/JPY Below 150

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  • February 24, 2025
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The US Dollar has stayed below 150 versus the Japanese Yen, at its lowest against the currency since October, because of increasing expectation that the Bank of Japan will keep raising rates as inflation endures. But backpedaling on JGB yields caps the yen’s gains, as BoJ Governor Kazuo Ueda signals willingness to boost bond purchases if long-term yields increase too steeply. Even with USD-selling momentum, the dollar continues to be under pressure, weighed down by poor US economic data and persistent inflation worries. Japanese Yen bulls are going slow as falling JGB yields and chances of moreforceful BoJ rate hikes keep the currency’s regain in check, keeping the USD/JPY pair under the key 150 level. KEY LOOKOUTS • Track BoJ actions on bond purchases and policy changes since they can shift market sentiment fast and impact USD/JPY levels through major thresholds. • Monitor JGB yield movements keenly, as falling yields may top the yen’s rise, capping potential USD/JPY rebound and impacting overall market dynamics. • Monitor US economic data releases, such as retail and PMI numbers, because worsening indicators may lead to rapid changes in investor sentiment. • Monitor key technical levels on USD/JPY, as breaks of support or resistance areas may facilitate directional moves and quickly shift market positioning. Investors will need to keep a close eye on Bank of Japan policy moves, as surprise bond-buying interventions or rate hikes could quickly change USD/JPY dynamics. Trends in Japanese Government Bond yields need to be closely watched because steadily falling yields could hamper yen advances and cap pair recovery. It is also important to watch U.S. economic data, including retail sales and PMI numbers, closely because deteriorating data can quickly turn market sentiment. Lastly, monitoring important technical levels on the USD/JPY pair is essential since breaks through set support or resistance areas may force sudden directional movements. Bank of Japan policy and Japanese government bond yields since any surprise movements may rapidly change USD/JPY dynamics. Closely monitor U.S. economic indicators and important technical levels for early indications of shifts in market sentiment. • Yen bulls are still guarded even at a two-month peak, as a result of worries about falling Japanese government bond (JGB) yields. • BoJ Governor Kazuo Ueda indicated potential for more bond purchases if yields surge, foreshadowing additional rate hike expectations. • Recent figures reporting Japan’s core inflation at a 19-month peak support projections of more forceful monetary policy tightening. • The USD/JPY pair remains below the pivotal 150 level, with technical resistance anticipated close to this psychological level. • Weaker-than-expected US economic data, such as a disappointing Walmart sales estimate and weakening PMI, have added to renewed USD selling. • Follow-through buying might push the pair upward towards resistance levels, while any weakness in support might set off a more abrupt fall. • There is support on the immediate side around the levels of 148.85-149.00, with downside targets possible at the 147.00 levels if these are broken. Investors in Japanese Yen are being cautious in light of changing market conditions, with expectations of continued policy tightening from the Bank of Japan being muted by efforts to stabilize government bond yields. The central bank has indicated that it is prepared to step in should bond yields climb too steeply, a gesture that highlights its determination to preserve financial stability while coping with the challenges presented by increasing inflation. Recent evidence of a persistent increase in core inflation has further cemented market hopes for more assertive action, even as such policy signals work to contain speculative action in the currency. USD/JPY Daily Price Chart Chart Source: TradingView Concurrently, United States economic indicators such as softer retail sales projections and deceleration in general business activity have added to balanced sentiment in international markets. Investors are still keeping an eye on the overall economic environment, where cautious optimism is slowly giving way to a more cautious approach. With policymakers watching these closely, the changing economic story on both sides of the Pacific is to influence monetary strategies in the future without causing sudden changes in market activity. TECHNICAL ANALYSIS USD/JPY currency pair is currently struggling with major levels that may determine its immediate direction. The close proximity resistance around the 150.00 level acts as a psychological wall, and a prolonged break above this level could set the stage for the pair to aim for higher resistance around the 150.70-150.75 level and higher towards the 150.90-151.00 horizontal support. On the other hand, the region between 148.85 to 148.65 has proven to be a crucial support area, where a breakdown could pave the way for additional losses down to the 147.00-147.45 area. This technical configuration indicates that investors would be keenly watching these levels in order to assess the vigor of potential reversal or continuation moves on the pair’s path. FORECAST If sentiment improves, the USD/JPY pair may witness a gradual upward trajectory. A continued surge through the 150.00 psychological level can create a rally and enable the pair to probe resistance at around the 150.70-150.75 area and then advance towards the 150.90-151.00 zone. Such possible upmove would be underpinned by follow-through purchases and a positive reinterpretation of the policy position of the BoJ, which, if seen as an indicator of faith in Japan’s economic prospects, would fuel fresh investor sentiment. On the negative side, if the immediate support levels around 148.85-148.65 do not hold, the pair can see a sharper fall. A break in this region may trigger a quick change in sentiment, driving the pair lower towards the next support level in the 147.00-147.45 region. In such a case, ongoing vigilance among participants and fresh pressure from USD selling may intensify the fall, placing greater emphasis on these support levels in mitigating the downside risk.

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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

USD/JPY Outlook: Japanese Yen Falls Amid BoJ Rate Hike Expectations, Trump’s Tariff Concerns

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  • February 10, 2025
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The Japanese Yen is weakening further amid concerns that former US President Donald Trump might impose further trade tariffs against Japan, weighing on the latter’s economy. Though a marginal U.S. Dollar strength in the USD/JPY exchange rate supports this pair, another round of rising expectations for yet another rate hike by the BoJ limits losses in the Japanese Yen. Investors are closely watching Japan’s bond yields, inflation trends, and global market volatility, as the BoJ’s tightening stance contrasts with the Federal Reserve’s cautious approach. Additionally, technical indicators suggest that USD/JPY remains vulnerable below the key resistance zone of 152.50-152.45, making further downside movement a possibility. KEY LOOKOUTS • Investors anticipate another Bank of Japan interest rate hike, driven by rising inflation and real wage growth, supporting the Japanese Yen. • Renewed fears of U.S. trade tariffs on steel and aluminum imports may pressure Japan’s economy, potentially impacting the Yen’s strength. • A strong U.S. Dollar, supported by upbeat job data and Federal Reserve’s cautious stance, influences the USD/JPY pair’s price movement. • The USD/JPY pair faces strong resistance at this confluence zone, with a potential downside move if the pair fails to sustain above it. The Japanese Yen faces a complex trading environment as investors weigh the impact of potential U.S. trade tariffs, a strong U.S. Dollar, and expectations of further tightening by the Bank of Japan (BoJ). While hawkish BoJ sentiment and rising Japanese bond yields offer support to the Yen, concerns over Trump’s protectionist policies and their inflationary effects continue to pressure the currency. The Federal Reserve’s cautious stance, coupled with strong U.S. job data, further strengthens the Dollar, keeping the USD/JPY pair volatile. Meanwhile, technical indicators suggest that the pair remains vulnerable below the key resistance zone of 152.50-152.45, with potential downside risks if selling pressure intensifies. The Japanese Yen remains under pressure amid renewed U.S. trade tariff concerns and a strong U.S. Dollar, despite growing expectations of a BoJ rate hike. While rising Japanese bond yields offer some support, technical indicators suggest USD/JPY remains vulnerable below the 152.50-152.45 resistance zone, with potential downside risks. • Investors expect the Bank of Japan to raise interest rates again, supporting the Yen and narrowing the U.S.-Japan rate differential. • Renewed fears of U.S. trade tariffs on steel and aluminum imports add pressure on Japan’s economy and the Yen. • Strong U.S. job data and the Federal Reserve’s cautious stance provide a lift to the U.S. Dollar, impacting USD/JPY movement. • Higher Japanese Government Bond (JGB) yields support the Yen, limiting deeper losses despite global economic concerns. • USD/JPY faces strong resistance at this key confluence zone, making further gains uncertain. • The IMF points out spillover risks for BoJ rate hikes, which include increased costs of debt servicing and financial pressure on corporates. • The USD/JPY pair continues to trade in a volatile range due to uncertainty over U.S. trade policies, global inflation trends, and central bank decisions. The Japanese Yen remains on the back foot as renewed fears over potential U.S. trade tariffs and a strong U.S. Dollar take a toll on its performance. Former President Donald Trump’s proposal to impose additional tariffs on steel and aluminum imports raises fears of economic strain on Japan, adding to the Yen’s weakness. Meanwhile, the Federal Reserve’s cautious approach to interest rates, coupled with strong U.S. job data, continues to support the Dollar, keeping the USD/JPY pair elevated. Expectations of another rate hike by the Bank of Japan (BoJ) have also helped limit deeper losses for the Yen, as the widening JGB yields close the interest rate gap between the US and Japan. USD/JPY Daily Price Chart TradingView Prepared by ELLYANA The USD/JPY pair faces technical resistance around the 152.50-152.45 confluence zone, suggesting that further upside may be capped short of strong buying momentum. The International Monetary Fund (IMF) has also warned Japan to remain vigilant about potential financial risks stemming from BoJ’s tightening measures, including rising government debt costs and corporate financial stress. Additionally, Japan’s inflation-adjusted real wages have shown steady growth, reinforcing the case for further monetary tightening by the BoJ. With ongoing global market volatility and uncertainty around U.S. trade policies, the Yen’s movement remains highly sensitive to economic and geopolitical developments. TECHNICAL ANALYSIS USD/JPY pair remains vulnerable below the key resistance zone of 152.50-152.45, which includes the 100-day and 200-day Simple Moving Averages (SMAs). Indicators on the daily chart remain in negative territory, signaling a bearish bias, though not yet in the oversold zone. If the pair fails to sustain above this resistance level, fresh selling pressure could push prices lower towards the 151.25 support, followed by the critical 151.00-150.95 zone. A decisive break below this area could open the door for further declines towards the 150.50 psychological level and 149.60 horizontal support. However, a sustained move above 152.50 may trigger short-covering, allowing the pair to reclaim the 153.00 level, with further upside potential depending on market sentiment and fundamental catalysts. FORECAST The USD/JPY pair could see an upward movement if the U.S. Dollar remains strong, driven by positive economic data and the Federal Reserve’s cautious stance on rate cuts. A sustained break above the 152.50-152.45 resistance zone could trigger fresh buying interest, allowing the pair to reclaim the 153.00 psychological level. If bullish momentum persists, the next upside target would be 153.50, followed by the 154.00 mark. Further gains could be supported by renewed concerns over Japan’s economic outlook, particularly if the Bank of Japan takes a slower approach to monetary tightening. Any increase in global risk tone may also keep pushing investors toward the U.S. Dollar, as a haven, and subsequently lift USD/JPY more. On the downside, this pair has found some critical supports at 151.25 now, followed by the 151.00-150.95 zone. It can easily head down from that area, touching the next destination at 150.50; that is again a psychological target. If selling pressure intensifies, USD/JPY could extend its decline towards 149.60 and potentially test the December swing low near 148.65. Factors that

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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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