empty
26.03.2025 11:42 AM
USD/JPY. Analysis and Forecast

This image is no longer relevant

The Japanese yen remains under pressure today due to weak domestic economic data. In February, Japan's leading inflation indicator in the services sector rose by 3.0% year-over-year, slightly below the 3.1% increase recorded in January. This figure remains an important measure of inflation in Japan's service sector. Coupled with the upbeat sentiment in equity markets, this undermines the yen's safe-haven appeal.

However, Bank of Japan Governor Kazuo Ueda reaffirmed his intention to continue raising interest rates if economic and price developments align with forecasts outlined in the BoJ's quarterly outlook report. Combined with rising wages, this supports expectations of further monetary policy tightening. Substantial wage increases for the third consecutive year reinforce expectations of additional rate hikes by the central bank.

Meanwhile, some selling pressure on the U.S. dollar is helping the USD/JPY pair remain above the 150.00 level.

On the other hand, the U.S. Federal Reserve last week hinted at two potential 25-basis-point rate cuts by year-end. While the Fed raised its inflation forecast, it lowered the growth outlook due to uncertainties stemming from President Donald Trump's aggressive trade policies. Trump is expected to announce new tariffs taking effect on April 2, adding further uncertainty to the markets. Additionally, he imposed a secondary tariff on Venezuela, stating that any country purchasing oil or gas from Venezuela will face a 25% duty when trading with the U.S.

Growing pessimism over the U.S. economy has led to declining consumer sentiment for the fourth consecutive month. The Conference Board's Expectations Index fell to 65.2 — its lowest level in 12 years — indicating a potential recession. This pressured the U.S. dollar and led to a pullback from its nearly three-week high.

This image is no longer relevant

Despite hawkish remarks by Fed Governor Adriana Kugler about slowing progress in returning inflation to the 2% target, dollar bulls failed to gain the necessary support. Several upcoming speeches from Fed officials may influence the dollar's performance. For short-term momentum in USD/JPY, attention should also be given to the U.S. Durable Goods Orders report, but the key focus will be on Friday's Core PCE Price Index, which will likely shape the pair's next major moves.

This image is no longer relevant

Technical Outlook

A breakout above the 200-period Simple Moving Average (SMA) on the 4-hour chart is considered a key bullish signal.

The RSI (Relative Strength Index) on the daily chart is beginning to show positive momentum, pointing to potential further upside. However, the recent failure near the 151.00 level and a dip back below the psychological 150.00 mark warrant caution. Traders should wait for a solid confirmation above these levels before initiating new long positions to continue the pair's recovery.

The next leg higher could lift spot prices beyond the monthly high near 151.30 and toward the round 152.00 level.

This image is no longer relevant

Support Levels

On the other hand, the 149.55 level — yesterday's low — now offers immediate support. A break below this level could open the path toward 149.00, followed by stronger support around 148.78, which aligns with the 100-period SMA on the 4-hour chart. A breach of this zone may tilt the bias in favor of the bears and lead to further losses toward 148.00 and beyond.

This image is no longer relevant

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

The Fed Chair Is Steadfast as Steel

Everyone has already had time to review the results of the recent Federal Reserve meeting. In this article, I want to highlight a few positive points for the U.S. dollar

Chin Zhao 01:16 2025-05-09 UTC+2

GBP/USD: Bank of England Cuts Rates, Trump Signs Trade Deal with London

On Thursday, the Bank of England delivered a widely expected 25 basis point interest rate cut, and Donald Trump announced the conclusion of a trade agreement with the United Kingdom

Irina Manzenko 00:28 2025-05-09 UTC+2

The Dollar Shot Itself in the Foot

As the first week of May comes to a close, a true spring has arrived on the financial markets. Global risk appetite is surging amid the imminent launch of U.S.-China

Marek Petkovich 00:28 2025-05-09 UTC+2

EUR/USD. Analysis and Forecast

On Thursday, the EUR/USD pair is falling below the psychological level of 1.1300. The election of Friedrich Merz as Chancellor of Germany reduces uncertainty regarding the economic strength

Irina Yanina 11:12 2025-05-08 UTC+2

The Market Will Save Itself

The Fed is no longer the center of the financial universe, and the S&P 500's 13% rally from April lows has once again made U.S. equities expensive. That sums

Marek Petkovich 10:13 2025-05-08 UTC+2

Fed's Rate Hold and US-China Talks Support the Dollar (High Likelihood of EUR/USD and Gold Declines)

The Federal Reserve remained firm, with its leadership reaffirming a steadfast wait-and-see approach. Interestingly, the Fed did not respond to notable changes in the economy, citing heightened uncertainty

Pati Gani 09:53 2025-05-08 UTC+2

The Bank of England Is Ready to Cut Rates

The Bank of England is expected to cut interest rates by a quarter of a percentage point today and signal that another reduction is likely in June. This could potentially

Jakub Novak 09:21 2025-05-08 UTC+2

Why Gold Dropped Sharply After the Fed Meeting

Gold experienced a slight uptick following the Federal Reserve's meeting, where interest rates were kept unchanged and Fed Chair Jerome Powell stated that the central bank is in no rush

Jakub Novak 09:17 2025-05-08 UTC+2

FOMC Meeting Results

The euro and British pound resumed their decline against the US dollar following the release of the Federal Reserve meeting results; however, the drop was not significant, and the future

Jakub Novak 09:15 2025-05-08 UTC+2

What to Pay Attention to on May 8? A Breakdown of Fundamental Events for Beginners

Very few macroeconomic events are scheduled for Thursday, and none are significant. Germany will release its industrial production report for March, and the U.S. will publish weekly jobless claims. These

Paolo Greco 06:05 2025-05-08 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.