empty
14.05.2025 11:28 AM
USD/JPY. Analysis and Forecast

This image is no longer relevant

At the moment, the Japanese yen is showing positive momentum against the U.S. dollar for the second consecutive day.The key factor supporting the Japanese currency has been hawkish comments from Bank of Japan Deputy Governor Shinichi Uchida, who left the door open for further monetary policy normalization through interest rate hikes. Uchida stated that if the economy and prices evolve as expected, the central bank would continue raising rates. He also added that Japan's economic growth is expected to slow to around its potential before gradually resuming moderate expansion as other global economies recover. This boosts expectations for increased appeal of the yen, contributing to its strengthening.

Currently, traders have revised their expectations of aggressive Fed easing, reducing the likelihood of sharp future rate cuts. Nonetheless, investors are still pricing in roughly 56 basis points of Fed rate cuts by the end of the year. These expectations have been reinforced by weak U.S. consumer inflation data released on Tuesday.

According to the U.S. Bureau of Labor Statistics (BLS), the annual headline Consumer Price Index (CPI) dropped to 2.3% in April from 2.4% in March. The core CPI, which excludes volatile food and energy components, matched analysts' forecasts. These figures are keeping the U.S. dollar below the recent peak seen on April 11 and are exerting some pressure on the USD/JPY pair.

Despite this, optimism surrounding the trade truce between the U.S. and China continues to support positive sentiment across broader markets. Reports that both countries agreed to pause the trade war for 90 days and reduce mutual tariffs—along with President Donald Trump's statement about good relations with China—are not creating the kind of fear that would trigger a flight to safe-haven assets like the yen. Still, diverging monetary policy expectations between the Bank of Japan and the Federal Reserve are creating conditions for further short-term yen strength.

Overall, the current environment suggests the potential for a decline in USD/JPY driven by soft inflation data and positive trade developments. However, uncertainty remains regarding the Fed's next moves and the geopolitical landscape. Therefore, it's wise to closely monitor speeches from influential FOMC members, which could sway the dollar and provide direction for the currency pair.

Technical Outlook

Positive oscillators on the daily chart favor the bulls. As such, a correction below the psychological 147.00 level could be viewed as a buying opportunity near the 146.60–146.50 zone. However, a decisive break below this range would likely trigger technical selling, dragging USD/JPY toward the next round number at 146.00 and potentially toward the 145.50 zone, just ahead of the key psychological level at 145.00. A breach of 145.00 would shift momentum in favor of the bears.

On the other hand, the 147.65 level serves as resistance ahead of the 148.00 round level. Surpassing this barrier would open the path to the monthly high near 148.65. Additional buying beyond that high could act as a fresh trigger for bulls.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

AUD/JPY. Analysis and Forecast

The AUD/JPY pair is regaining positive momentum after a modest pullback the previous day. However, spot prices remain confined within a multi-day range due to mixed fundamental signals, trading near

Irina Yanina 14:39 2025-06-20 UTC+2

USD/CHF: The Pair Struggles to Gain Momentum Amid Conflicting Forces

At present, USD/CHF shows no clear intraday direction and fluctuates within a narrow range just above the 0.8155 level, reflecting market uncertainty during the European session. The Swiss franc

Irina Yanina 14:36 2025-06-20 UTC+2

The Euro Will Retain Its Strength and Investor Interest

During her speech, IMF Managing Director Kristalina Georgieva stated that she sees the potential for the euro to play a broader role globally.Her remarks came amid growing geopolitical instability

Jakub Novak 11:25 2025-06-20 UTC+2

Euro Slightly Rises After Lagarde's Speech

The euro saw a modest recovery after European Central Bank President Christine Lagarde stated that expanding trade within the region could help offset losses resulting from global fragmentation. Her optimistic

Jakub Novak 11:10 2025-06-20 UTC+2

Donald Trump – A Mastermind of Geopolitical Uncertainty (A Potential Correction in Oil and Gold Prices)

Six months into Donald Trump's presidency, it seems he has already thoroughly exhausted the world with his "brilliant" initiatives, groundbreaking actions aimed at making America great again, and his vivid

Pati Gani 09:49 2025-06-20 UTC+2

The Market Tries to Extinguish the Fire

Markets are digesting Donald Trump's announcement that a decision on U.S. strikes against Iran will be made within two weeks. The White House could have acted at any moment

Marek Petkovich 09:01 2025-06-20 UTC+2

What to Pay Attention to on June 20? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic reports scheduled for Friday. The only report of the day will be the UK retail sales report. No economic data will be released today

Paolo Greco 07:45 2025-06-20 UTC+2

GBP/USD Overview – June 20: The Bank of England Didn't Surprise

The GBP/USD currency pair traded relatively calmly on Thursday, given the fundamental backdrop available to the market. On Wednesday evening, the Federal Reserve announced the results of its latest meeting

Paolo Greco 07:16 2025-06-20 UTC+2

EUR/USD Overview – June 20: Summing Up the Fed Meeting

The EUR/USD currency pair traded relatively calmly on Wednesday and Thursday. Recall that the results of the latest 2025 Federal Reserve meeting were announced on Wednesday evening, but we didn't

Paolo Greco 07:16 2025-06-20 UTC+2

USD/JPY. Analysis and Forecast

The Japanese yen is showing weakness against the stronger U.S. dollar, with the USD/JPY pair reaching a new monthly high. This rise in the dollar against the yen is mainly

Irina Yanina 20:12 2025-06-19 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.