Tag: USD/JPY

• The USD/JPY forecast shows an increasing likelihood that the BoJ will delay rate hikes to next year.

• Talks between China and the US ended, easing trade war fears.

• Traders are paying close attention to the upcoming US CPI report.

The USD/JPY forecast shows an increasing likelihood that the Bank of Japan will delay rate hikes to next year. Meanwhile, talks between the US and China ended with few details. At the same time, market participants are awaiting the US CPI report for clues on the future of Fed rate cuts. 

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A Reuters poll on Wednesday revealed that a slim majority of economists believe the BoJ will hike in Q1. According to them, the impacts of Trump’s tariffs will force policymakers to delay hikes. Meanwhile, top officials at the bank have reiterated that they will continue to hike rates when inflation and growth re-accelerate. 

Elsewhere, talks between China and the US ended, easing trade war fears. However, there were few details on the outcome of the talks. Still, just the fact that they met and discussed trade was enough to show progress in negotiations. 

Meanwhile, traders are paying close attention to the upcoming US CPI report. The data might show a 0.2% increase in price pressures in May. Meanwhile, the annual figure might increase from the previous 2.3% to 2.5%. If inflation is hot, it will confirm fears that Trump’s tariffs have hiked price pressures. Such an outcome would mean more delays on Fed rate cuts.

USD/JPY key events today

• US core CPI m/m
• US CPI m/m
• US CPI y/y

USD/JPY technical forecast: Broken trendline yells for more gains

On the technical side, the USD/JPY price has broken above a solid resistance trendline, a sign that bulls might be ready to take charge. The price trades above the 30-SMA, with the RSI over 50, showing bulls are in the lead. However, they are facing a solid hurdle at the 145.00 key level. 

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For some time, the price has been making lower highs. However, it has failed to make lower lows as the 142.55 held firm as support. If bears cannot make lower lows, bulls will likely get stronger and start making higher highs and lows. 

A break above the 145.00 key resistance level will clear the path for USD/JPY to retest the 147.00 key level. On the other hand, if the level holds firm, the price will likely drop back below the trendline to retest the 142.55 support. 

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• The USD/JPY outlook indicates that the yen is starting the week strong.

• A former top currency diplomat in Japan noted that the yen could strengthen to the 135-140 range.

• The US released data showing 139,000 new jobs in May.

The USD/JPY outlook indicates that the yen is starting the week strong as market focus shifts back to policy outlooks. On Friday, Japan’s currency collapsed against a strong dollar after the US released a better-than-expected employment report. 

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An ex-top currency diplomat in Japan noted on Friday that the yen could strengthen to the 135-140 range against the dollar, mainly due to policy divergence. The Federal Reserve’s next move will likely be a rate cut. Despite a resilient economy, several sectors have experienced a slowdown. At the same time, inflation is easing, giving policymakers confidence to lower borrowing costs. 

On the other hand, the Bank of Japan has stated that it will continue to hike rates as long as the economy re-accelerates after the global tariff slowdown. Rate cuts in the US and rate hikes in Japan will result in a narrowing interest rate gap. This, in turn, will boost the yen. 

On Friday, the US released data showing 139,000 new jobs in May. This was bigger than the forecast of 130,000. As a result, rate cut expectations eased. Meanwhile, the dollar rallied. Market participants are now looking forward to crucial inflation figures from the US for more clues on rate cuts.

USD/JPY key events today

Market participants are not expecting any high-impact reports from the US or Japan. 

USD/JPY technical outlook: Bears return after trendline retest 

On the technical side, the USD/JPY price is pulling back after meeting its resistance trendline and the 145.00 key level. However, the bias is bullish because the price trades above the 30-SMA, with the RSI above 50. The bias will only change if bears breach the SMA line. 

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USD/JPY has gradually descended, making lower highs. However, bears have been unable to break below the 142.55 support level. As a result, the price has been forming a descending triangle. 

There is a high chance it will breach the 30-SMA to retest the 142.55 support. If bears have gained enough momentum, the price will break below this level, starting to make lower lows. However, if they are still weak, it will bounce again, remaining in the descending triangle.

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• The USD/JPY price analysis shows strength in the yen after Ueda’s comments.

• The BoJ will hike rates if the economy re-accelerates.

• Data revealed soft business activity in the US manufacturing sector.  

The USD/JPY price analysis shows strength in the yen after BoJ’s Ueda said the central bank would hike rates if growth re-accelerates. At the same time, the yen strengthened as safe-haven demand rose on renewed trade tensions between the US and its trading partners.

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Bank of Japan Governor Kazuo Ueda said on Tuesday that the central bank would hike rates if the economy re-accelerated. He also noted that wage growth must re-accelerate. At the moment, Trump tariffs have dimmed the outlook for the economy. Therefore, it might not be the best time to hike interest rates. However, if the economy rebounds after a brief pullback, policymakers will be ready to hike. This news boosted the yen.

Furthermore, the yen continued its rally as safe-haven demand rebounded on trade tensions. Trump promised to double tariffs on steel and aluminum imports. The move will likely increase trade tensions between the US and its partners, like Canada and the Eurozone. Moreover, it revealed that Trump was going on with his tariff campaign. Therefore, the risk of a global trade war remains. 

Elsewhere, the dollar eased after data revealed soft business activity in the US manufacturing sector. The ISM PMI came in at 48.5, below estimates of 49.3. The decline showed the effects of Trump’s tariffs on the US economy. Traders will now wait to see employment figures.

USD/JPY key events today

USD/JPY technical price analysis: Bears challenge the 142.55 support

On the technical side, the USD/JPY price is testing a major support at the 142.55 level. It trades below the 30-SMA with the RSI under 50, suggesting a bearish bias. The price recently reversed to the downside when it broke and stayed below the 30-SMA. 

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Furthermore, although there was a strong rebound at the 142.55 level, it only made a lower high. This is a sign that bulls could not sustain a move above the 30-SMA. As a result, bears returned to push USD/JPY below the SMA. 

At the moment, the price is challenging the 142.55 support. A break below this level will make a lower low, confirming a continuation of the downtrend. Moreover, such a move would allow bears to target the 140.01 support level.

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• USDJPY outlook turned bullish after Japanese bond market intervention and easing U.S.-EU trade tensions lifted the pair.
• A bullish reversal pattern formed, hinting at a short-term bottom, but the broader trend remains bearish.
• Market focus now turns to U.S. data for further dollar strength and to Japanese yields for signs of renewed yen support.

The USD/JPY outlook has shown a mild shift in sentiment, stemming from the recent surge in US dollar and yen’s weakness. However, the situation is complex due to a mix of monetary policy divergence and short-term political developments.

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The US dollar regained strong footing after US Core Durable Goods data marked the best figures in past four years. The delayed tariffs on EU imports until July 09 has also given some life to the dollar. The decision eased the market fears of escalating trade tensions and triggered a broad risk-one sentiment in global markets. Hence, yen being a safe haven asset suffered against the US dollar.

Moreover, the US dollar also found significant support from easing inflation pressure as this could refrain the Fed to act aggressively in cutting rates. The US economic resilience could further support the USD/JPY bulls.

On the other hand, the yen found headwinds despite stronger than expected Japanese inflation. The BoJ Governor Kazuo Ueda warned about a hike in food prices, hinting at a hawkish stance. However, the BoJ is still far from a meaningful tightening policy. The central bank is navigating exit from the easing monetary policy and start tightening while the Federal Reserve is debating when to cut rates. The policy divergence could favor the yen against dollar.

Moreover, the Japanese government announced that it would trim the super-long bonds. The objective was to calm the sharp rise in yields that had previously supported the yen through repatriation. This signals a potential bullish momentum for the USD/JPY.

Key Data for USD/JPY Today

The major event on the day is FOMC meeting minutes that could unfold the potential monetary policy and rate path.

USD/JPY Technical Outlook: Buyers Looking to Break Triangle

The USD/JPY formed a strong bullish reversal signal after finding a bottom at 142.35. It followed a breakout of ascending triangle and resistance at 143.00. The rally paused at 20-day SMA around 144.80.

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If the buyers sustain above the 144.00 level, the price can test 146.00 and potentially aim for 148.32. However, the broad bearish trend initiated from January still remains until the price moves above the 50% Fib level. A drop below 142.00 could invalidate the recent bullish bias and may look for 139.80 ahead of 138.70.

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• The USD/JPY forecast suggests increasing demand for the safe-haven yen.

• Trump’s tax bill might add to the US’s already huge debt burden. 

• Traders will keep an eye on US business activity data.

The USD/JPY forecast is bearish, suggesting increasing demand for the safe-haven yen amid fiscal concerns in the US. At the same time, the dollar weakened against the yen after a poor Treasury bonds auction, which pointed to weak demand for US assets.

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The yen extended gains on Thursday after reaching a two-week high against the dollar in the previous session. The rally came as market participants watched the progress of Trump’s tax bill. Although it had faced some resistance from Republicans, the bill might pass the Senate. Trump’s tax bill might add to the US’s already huge debt burden. 

Notably, Moody’s downgraded the US government’s credit rating, citing the country’s growing debt. The move further weighed on investor confidence in US assets. 

However, the dollar got some support against the yen after reports that the US and Japan had agreed that USD/JPY moves reflected fundamentals. Initially, market participants were suspicious that the US would pressure Japan to strengthen the yen. The US has suspected that Japan is keeping the yen weaker on purpose. A strong yen would allow US manufacturers to get a competitive edge.

Meanwhile, traders will keep an eye on US business activity data for clues on future Fed moves. Weak numbers will increase bets for a rate cut in September. The opposite is also true.

USD/JPY key events today

• Unemployment Claims
• Flash Manufacturing PMI
• Flash Services PMI

USD/JPY technical forecast: Sentiment shifts breaks support trendline

On the technical side, the USD/JPY price has broken below a solid support trendline, indicating a bearish shift in sentiment. The price now trades well below the 30-SMA with the RSI in the oversold region, suggesting a strong bearish bias. 

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Initially, the price was in an uptrend, making higher highs and lows. Pullbacks respected the support trendline. However, after the last swing high, bears gained enough momentum to push the price below the 30-SMA and the support trendline. This showed they were ready to change the trend. However, they must still face the 142.55 support level. 

A break below this level would make a lower low, confirming the start of a downtrend. After that, the price would have to continue with a series of lower highs and lows.

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• The USD/JPY forecast shows further dollar weakness.

• US consumer sentiment came in at 50.8 compared to expectations of 53.1.

• Trump’s tariff threats caused some uncertainty in the market.

The USD/JPY forecast shows further dollar weakness after a downgrade to the US government’s credit rating. At the same time, market participants were worried about progress on trade negotiations between the US and its trading partners. 

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The dollar fell on Friday after data revealed weak consumer sentiment. According to the report, consumer sentiment came in at 50.8 compared to expectations of 53.1. The unexpected drop revealed that consumers were still not confident in the economy. 

Moreover, the greenback started the week down against most of its peers, including the yen. This happened after Moody’s downgraded the US government’s credit rating, citing its growing debt size. This was another reason for traders to dump the dollar and buy the yen.

Furthermore, demand for the safe-haven yen increased after reports that Trump was threatening tariffs on countries that are not negotiating in good faith. The US has announced trade deals with the UK and China, which boosted sentiment. However, talks with India, Japan, and South Korea seem to have stalled. As a result, Trump’s tariff threats caused some uncertainty in the market. 

Meanwhile, BoJ policymakers are ready to keep hiking interest rates as long as the economy pushes past Trump’s tariff impacts. 

USD/JPY key events today

Market participants do not expect any key economic releases from the US and Japan.

USD/JPY technical forecast: Bears reach a pivotal support zone

On the technical side, the USD/JPY price has pulled back and is approaching its support trendline. The price trades below the 30-SMA, with the RSI under 50, indicating a bearish bias. At the same time, the price has reached the 0.618 Fib retracement level that might act as a support. 

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Therefore, USD/JPY might soon bounce higher. The price has maintained a shallow uptrend that chops through the SMA but respects the trendline. Consequently, the uptrend will continue if bulls return near the trendline support. Such an outcome would allow the price to break above the 146.02 resistance level and the 30-SMA. Bulls would likely break above the 148.51 resistance level to make a new high. 

On the other hand, a break below the trendline would signal a shift in sentiment. It would allow bears to retest the 142.55 support level.

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• The USD/JPY outlook shows a rebound in the yen.

• Japan’s wholesale inflation rose by 4.0% in April.

• Traders are looking forward to US data on sales.

The USD/JPY outlook shows a stronger yen due to a growing divergence in policy outlooks between the Fed and the Bank of Japan. Inflation in the US continues dropping while that in Japan continues rising. 

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The yen extended its rally on Thursday after data in the previous session revealed higher producer inflation in Japan. Wholesale inflation rose by 4.0% in April, increasing pressure on the Bank of Japan to keep hiking interest rates. Moreover, recent wage growth and inflation figures from the country have shown an uptrend and a conducive environment for higher borrowing costs. As a result, rate hike expectations are gradually rising, supporting the yen. 

On the other hand, the US is witnessing softer inflation. Data on Tuesday revealed that inflation increased by 2.3%, below estimates of a 2.4% increase. The numbers weighed on the dollar and increased bets for a Fed rate cut in September. Rate cuts in the US and hikes in Japan will continue to shrink the gap in rates between the two countries. This will boost the yen. 

Meanwhile, traders are looking forward to US data on sales, wholesale inflation, and unemployment claims. Moreover, a speech from Powell might shape the outlook for rate cuts.

USD/JPY key events today

• US core PPI m/m
• US PPI m/m
• US retail sales m/m
• US core retail sales m/m
• US unemployment claims
• Fed Chair Powell Speaks

USD/JPY technical outlook: 30-SMA break signals bearish sentiment shift

On the technical side, the USD/JPY price has broken below the 30-SMA and the 146.02 key level. The price now sits below the SMA with the RSI under 50, suggesting a bearish bias. Bulls were in the lead until the price reached the 148.51 resistance level. Here, bears resurfaced and were strong enough to take charge by pushing the price below the SMA. 

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Although sentiment has shifted, the shallow uptrend remains intact. The price is still in a higher high, higher low pattern. To confirm a new downtrend, the price would have to break below its support trendline. Furthermore, it would have to make a new low below the 142.55 level. Otherwise, it might only retest the trendline before climbing to make a new high above the 148.51 resistance level. 

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• The USD/JPY outlook shows a loss of appeal for safe-haven currencies.

• China and the US finally agreed to pause the tariffs for 90 days.

• India and Pakistan agreed on a ceasefire.

The USD/JPY outlook shows a loss of appeal for safe-haven currencies like the yen amid easing trade and geopolitical tensions. China and the US have agreed on a 90-day pause on tariffs. Meanwhile, India and Pakistan have agreed on a ceasefire, while Russia is finally ready to meet Ukraine.

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Over the weekend, top officials from China and the US met to discuss trade policy. The trade war between the two countries started in early April. It has rocked financial markets, sending most away from the dollar and to safe-haven assets like the yen. 

However, this changed on Monday as the dollar rallied and the yen collapsed. China and the US finally agreed to pause the tariffs for 90 days. Moreover, China is ready to cut the US trade deficit. The news boosted risk appetite and consumer confidence in US assets.

Furthermore, the yen suffered as India and Pakistan agreed on a ceasefire, pausing a war that had raised economic concerns. Moreover, Russia’s president finally agreed to meet Ukraine’s leader, raising hopes of another ceasefire deal. With geopolitical tensions easing, investors are becoming more confident. As a result, safe-haven assets like the yen are collapsing.

USD/JPY key events today

Market participants are not looking forward to any high-impact reports from the US or Japan. All focus will remain on US trade policy developments.

USD/JPY technical outlook: Solid rally meets the 148.02 key level

On the technical side, the USD/JPY price has rallied sharply to reach the 148.02 key level. At the same time, the price trades well above the 30-SMA, showing bulls have a strong lead. Moreover, the RSI trades in the overbought region, indicating solid bullish momentum. 

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The price has maintained a bullish trend, making higher highs and lows. However, it paused at the 146.02 level, which was the previous high. The price eventually broke above with a solid bull candle, showing a surge in momentum. Given the solid bullish bias, the price might break past the 148.02 resistance to make new highs. 

However, after such a sharp move, the rally might pause to allow the SMA to catch up before continuing higher. In such a case, the price could retreat to the 146.02 level.

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• The USD/JPY outlook shows a stronger yen at the start of the week.

• The BoJ faces high food inflation, strong wage growth, and the possibility of a weak yen.

• US employers added 177,000 new workers, beating estimates of 138,000.

The USD/JPY outlook shows a stronger yen at the start of the week, as market participants maintain hopes for further BoJ tightening. Meanwhile, the dollar strengthened against the yen briefly on Friday after an upbeat US employment report. 

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The yen collapsed Thursday after the Bank of Japan kept interest rates unchanged. Furthermore, the central bank downgraded its outlook for growth and inflation due to the impact of Trump’s tariffs. Governor Ueda noted that Trump’s trade policies had created a lot of uncertainty. Experts took this to mean the policymakers would delay rate hikes. As a result, rate hike expectations dropped. 

However, Japan’s currency rebounded on Friday after the impact of the policy meeting faded. The BoJ has to face high food inflation, strong wage growth, and the chances of a weak yen. Therefore, hopes are still alive that policymakers will boost interest rates.

Meanwhile, the greenback got a brief boost from data showing a resilient labor market. The economy added 177,000 new workers, beating estimates of 138,000. The unemployment rate was unchanged at 4.2%. After the report, market participants priced a 35% chance of a June Fed rate cut, down from 58%. 

However, due to Trump’s tariffs, analysts expect employment to deteriorate in the coming months. 

USD/JPY key events today

USD/JPY technical outlook: Brief retreat meets solid support zone

On the technical side, bulls have found their footing above the 30-SMA. The trend recently reversed when bears failed to go below the 140.01 support level. The price broke above it resistance trendline and pulled back for a retest. After that, it made a higher high, confirming the new uptrend. 

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However, after a new high, the price has returned to retest the recently broken 144.02 key level. At the same time, it is trading nearer the 30-SMA, which is another support level. Still, the price is above the SMA and the RSI is slightly over 50, suggesting a bullish bias. 

Therefore, bulls might return at this support zone to seek new highs. A bounce higher will likely target the 148.01 resistance level. The trend will only change when the price breaks and stays below the SMA.

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• The USD/JPY price analysis indicates an improvement in risk appetite.

• The US president said he was ready to reduce tariffs on automobiles.

• India will be the first to sign a trade deal with the US.

The USD/JPY price analysis indicates an improvement in risk appetite following Trump’s promise to lower automotive tariffs. At the same time, progress on trade negotiations with countries like India has reduced the risk of a global trade war. However, the dollar remains fragile amid uncertainty over the fate of trade talks between the US and China. 

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The US president said he was ready to reduce tariffs on automobiles on Tuesday, slightly easing economic concerns. Trump’s tariff campaign has become less aggressive in recent days as he acknowledges the risk to the economy. Last week, the president criticized the Fed, demanding lower interest rates to support the economy. However, Powell has remained cautious, not giving any clear signals on when the next rate cut will come. This has sobered Trump, leading to his softer stance. 

Moreover, negotiations with countries that might suffer reciprocal tariffs are ongoing. On Monday, Scott Bessent said India would be the first to sign a deal with the US. As a result, market participants are optimistic about the global economy. 

However, progress with China has stalled with neither country willing to be the first to cut tariffs. The US is waiting for China to start lowering its tariffs before they do the same. Still, the US has admitted that the current tariffs are unsustainable. Therefore, eventually, one side will have to start the process. 

USD/JPY key events today

USD/JPY technical price analysis: Bulls retest the 30-SMA resistance

On the technical side, the USD/JPY price has broken above and retested a solid resistance trendline. However, it has returned below the 30-SMA, and the RSI is now under 50. Still, bulls are challenging the SMA resistance. 

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USD/JPY has been on a decline since bears took the lead at the top of the chart. The price mostly stayed below the 30-SMA. Moreover, the highs of the downtrend respected a clear resistance trendline. However, things changed after the price reached the 140.01 support level. 

Here, bulls became stronger, pushing the price above the 30-SMA and the trendline. Furthermore, the price pulled back to retest the line. From here, bulls must break above the 144.02 resistance to make a higher high and confirm an uptrend. Otherwise, the downtrend will continue.

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• The USD/JPY price analysis indicates accelerating price pressures in Japan.

• Tokyo’s CPI increased by 3.4%, which is above forecasted to be a 3.2% increase.

• The dollar regained appeal as trade tensions between China and the US eased.

The USD/JPY price analysis indicates accelerating price pressures in Japan, which may prompt the Bank of Japan to raise rates. However, policymakers remain concerned about the economic impacts of Trump’s tariffs. Meanwhile, easing trade tensions between China and the US supported the dollar.

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The yen strengthened briefly on Friday after data revealed that inflation in Tokyo beat estimates. The CPI increased by 3.4%, above forecasts of a 3.2% increase. Moreover, it recorded a massive jump from the previous reading of 2.4%. Accelerating inflation aligns with the BoJ’s recent message of more rate hikes. However, Trump’s tariffs have created uncertainty about the timing of the timing of the next move. 

On the other hand, the dollar regained its appeal as trade tensions between China and the US eased. Both countries appear ready to lower tariffs and begin negotiations. The US has said it can lower tariffs on Chinese goods to 50%. Meanwhile, China is ready to exempt some US goods from tariffs. A deal to end the trade war would boost the dollar and ease economic worries. Meanwhile, the yen might lose its safe-haven appeal and drop.

USD/JPY key events today

Traders do not expect any high-impact economic releases from the US or Japan. Therefore, they will keep watching trade war developments.

USD/JPY technical price analysis: Channel breakout signals new trend

On the technical side, the USD/JPY price has broken out of its bearish channel. Immediately after the breakout, the price pulled back to retest the channel resistance and is now climbing higher. The channel breakout indicates a bullish shift in sentiment. The price now trades above the 30-SMA, and the RSI is above 50. Therefore, the bullish bias is strong. 

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Bears had a strong lead, maintaining a downtrend, with the price mostly below the 30-SMA. However, they could not go past the 140.01 support level. Consequently, bulls took over by pushing the price above the SMA and past the channel resistance. 

Given the strong bullish bias, USD/JPY could soon retest the 145.02 resistance level. A break above this level will confirm a new uptrend.

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• The USD/JPY price analysis shows a relief rally in the dollar.

• Trump told reporters he had no intention of removing Powell from office. 

• Market participants are expecting business activity data from the US.

The USD/JPY price analysis shows a relief rally in the dollar after Trump paused his attacks on the Fed. Meanwhile, market participants are awaiting US business activity data for further clues on future Fed policy moves.

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The USD/JPY pair rose on Tuesday after Trump told reporters he had no intention of removing Powell from office. Initially, the dollar had collapsed amid threats to fire the Fed Chair. Trump was calling for the US central bank to lower borrowing costs and support the slowing economy. However, Powell has maintained a cautious tone, waiting for more evidence on inflation and growth. 

Trump’s policy announcements in recent weeks have caused wild swings in the market. Initially, they cause a plunge before he softens his stance, causing a relief rally. However, all this has caused more uncertainty about the stability of US assets. Therefore, although the dollar recovered, the outlook remains bleak. 

Meanwhile, market participants are expecting business activity data from the US. Upbeat figures might support the dollar. On the other hand, downbeat figures would increase recession concerns, putting pressure on the Fed to cut rates. 

In Japan, the BoJ will likely pause at its May 1 meeting. However, analysts believe policymakers will maintain a hawkish tone due to a strong labor market and steady inflation.

USD/JPY key events today

• US flash manufacturing PMI
• US flash services PMI

USD/JPY technical price analysis: Price pauses to retest its channel resistance

On the technical side, the USD/JPY price has risen to retest the 142.02 key level and its bearish channel resistance. At the same time, the price is retesting the 30-SMA and has gone slightly above it. This is a sign that bulls are challenging the downtrend. The RSI has also broken above 50, suggesting stronger bullish momentum. 

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However, the price recently made a lower low, continuing its downtrend. Moreover, it has maintained its decline in a bearish channel with clear support and resistance levels. Therefore, if the price remains within this channel, it will soon bounce lower to retest the 140.01 support level. 

On the other hand, if bulls gain enough strength, they might trigger a break above the channel resistance. Such an outcome would signal a bullish sentiment shift.

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• The USD/JPY forecast indicates weaker investor confidence in the US economy.

• The Trump administration hinted at plans to fire Fed Chair Jerome Powell.

• Data last week revealed stronger-than-expected sales in the US.

The USD/JPY forecast indicates weaker investor confidence in the US economy following Trump’s comments, threatening the Fed’s independence. As a result, market participants are dumping the dollar and buying the safer yen. 

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On Friday, the Trump administration hinted at plans to fire Fed Chair Jerome Powell, causing panic among traders. Since he came into office, the US president has wanted the Fed to continue its easing cycle. However, Powell has maintained a cautious tone, saying there was no hurry to lower borrowing costs. The Fed Chair believes the central bank needs more time to assess the impact of Trump’s tariffs. 

Trump’s comments raised fears that he would undermine the independence of the US central bank. Such an outcome would further lower investor confidence in the US economy. Already, Trump’s wild tariffs have dimmed the economy’s outlook. If his administration takes control of monetary policy, the outlook could worsen.

Meanwhile, data last week revealed stronger-than-expected sales in the US. The upbeat report pointed to robust consumer spending. However, analysts believe future reports will better capture the impact of Trump’s tariffs. This week, traders will focus on PMI data for further clues on the state of the economy. 

Elsewhere, speculators bet on a stronger yen due to expectations for more rate hikes by the BoJ.

USD/JPY key events today

Market participants do not expect any key economic releases from Japan or the US today. Therefore, the pair might extend last week’s moves.

USD/JPY technical forecast: Bears head for the 140.01 support

On the technical side, the USD/JPY price has broken below the 142.02 key support level, resulting in a lower low. At the same time, the price has swung well below the 30-SMA, showing bears have a solid lead. Meanwhile, the RSI trades in the oversold region, indicating solid bearish momentum. 

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Bears have maintained control since they broke below the SMA. The price has traded in a bearish channel with clear support and resistance lines. Currently, USD/JPY is approaching the channel support. At the same time, it is nearing the 140.01 key level. A break below will strengthen the bearish bias. However, the price might pause or pull back before continuing lower.

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• The USD/JPY price analysis shows escalating trade tensions between China and the US.

• Trump has threatened to impose another 50% tariff on Chinese goods.

• The BoJ might pause to assess incoming data.

The USD/JPY price analysis shows escalating trade tensions between China and the US that is sending traders to the safe-haven yen. Meanwhile, the dollar collapsed on Wednesday as analysts increased the likelihood of a US recession. 

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The turmoil from last week returned to the markets on Wednesday due to a growing conflict between China and the US. Last week, Trump imposed a total of 54% tariffs on China, dimming the outlook for the economy. As a result, China promised counter-tariffs on US imports. In response, the US president has threatened to impose another 50% tariff on Chinese goods. Such an outcome will hurt both China and the US. 

A bigger trade war between the two largest economies will likely weaken the global economy. At the same time, experts are increasing the likelihood of a US recession. The developments on Wednesday increased market panic, sending investors to the safe-haven yen. Meanwhile, the greenback dropped. 

Elsewhere, Bank of Japan governor Kazuo Ueda said the central bank would continue raising interest rates. However, he noted that this would depend on whether the economy performs. However, given Trump’s tariffs, there is a chance policymakers will pause to assess incoming data.

USD/JPY key events today

• FOMC policy meeting minutes

USD/JPY technical price analysis: Bears gear up for a new low below 145.01

On the technical side, the USD/JPY price has dropped to retest the 145.01 support level. The price trades far below the 30-SMA, showing bears are in the lead. At the same time, the RSI trades near the oversold region, indicating solid bearish momentum. 

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The first time bears met the 145.01 support, they failed to break below. As a result, bulls returned to push the price higher. However, the bullish move was brief and it paused when the price met a solid resistance zone comprising the 30-SMA and the 148.02 level. The zone allowed bears to return and retest the 145.01 support. 

A break below this level will make a lower low, continuing the downtrend. On the other hand, if the level holds firm, the price will consolidate before breaking below or bouncing higher.

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• The USD/JPY forecast shows solid demand for safe-haven assets like the yen.

• Trump announced new tariffs affecting almost all its trading partners.

• Market participants are pricing a higher 55% chance of a Fed rate cut in May.

The USD/JPY forecast shows solid demand for safe-haven assets like the yen amid growing global economic uncertainty. Meanwhile, the dollar slipped as market participants worried about the impact of Trump’s trade policies on the economy. At the same time, the greenback faced pressure from a rise in Fed rate cut expectations. 

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The yen held steady at the start of the week as safe-haven demand remained high. Traders started flocking to Japan’s currency last week after Trump announced new tariffs affecting almost all its trading partners. As a result, worries about an escalation in trade wars dampened risk appetite. 

At the same time, market participants worried about the impact of these tariffs on the US economy. Most major companies depend on exports and imports. Therefore, an increase in prices will directly impact business. 

Moreover, the labor market might suffer as companies reduce their workers to adjust to the rising costs. Such an outcome would put pressure on the Federal Reserve to lower borrowing costs and spur growth. Currently, market participants are pricing a higher 55% chance of a rate cut in May.

USD/JPY key events today

Market participants do not expect any key economic releases from Japan or the US. Therefore, they will keep digesting recent US trade policy changes.

USD/JPY technical forecast: Bears poised to make new lows below 145.01

On the technical side, the USD/JPY price has paused near the 145.01 support level after a steep decline. Still, the bearish bias remains strong since the price sits far below the 30-SMA with the RSI below 50. 

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Bears took over from bulls when the price paused at its peaks and the RSI made a bearish divergence. As a result, USD/JPY broke below the SMA. After pulling back to retest the SMA line, the price collapsed in a steep downtrend, breaking below the 146.75 support. The decline has paused at the 145.01 level, allowing the price to retest the recently broken 146.75 level. 

Given the solid bearish bias, the price might soon break below 145.01 to make a new low. However, if the support holds firm, it might consolidate before breaking below the support.

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• The USD/JPY outlook remains strongly bearish after Trump’s tariffs.
• BoJ and Fed divergence, along with falling US yields, lend more support to the yen.
• Tariffs pose a threat to Japan’s export-driven economy as well, igniting further uncertainty.

The USD/JPY outlook is predominantly bearish as the yen capitalizes on safe-haven appeal due to President Trump’s sweeping trade tariffs. The pair plummeted 1.2%, marking fresh 3-week lows near 147.20 during the early Asian session. With mounting fears of a US recession, investors are fleeing to the JPY, reinforcing its strength against the US dollar.

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Riskier assets saw a broader sell-off after the latest round of Trump’s tariffs. The stocks slipped, and bond yields dipped, creating a demand for conventional safe-haven assets. The US 10Y hit a YTD low at 4.0%, reinforcing the potential for a Fed rate cut.

The ongoing divergence between the Federal Reserve and the Bank of Japan further fueled the JPY rally. While the Fed is widely expected to cut rates, BoJ remains uncertain. Previously, market participants were expecting an aggressive stance from BoJ. However, Japan’s export-driven economy may suffer as a result of recent tariffs. Still, the recent Tokyo consumer inflation figures suggest that the BoJ may retain its hawkish stance.

Despite Trump’s tariffs favoring the US dollar in the long run, the likelihood of a rate cut and the risk of a recession has undermined the Greenback. According to Wells Fargo analysts, monetary easing is expected to be more pronounced in 2025-26, which could keep the dollar defensive.

Key Events for USD/JPY

Looking ahead, traders will primarily focus on the following:

• Weekly jobless claims
• ISM Services PMI

Still, the broader focus remains on trade development and China’s potential reaction.

USD/JPY technical outlook: Sellers looking at 146.55

The USD/JPY 4-hour chart shows a gloomy picture. The price is slipping towards the key support level at 146.55. The pair lies well below the 30-period SMA, posing a risk of a deeper downside. However, the RSI value reaches 30.0, which indicates an oversold zone. Hence, corrective upside can be expected.

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On the upside, the 30-period SMA is one tough nut to crack for the buyers. Meanwhile, a strong resistance level emerges at 151.15. The path of least resistance lies on the downside.

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• The USD/JPY price analysis shows a rebound in the safe-haven yen.

• Data on Tuesday revealed poor business sentiment among Japanese manufacturers.

• The dollar drifted on Tuesday, ahead of the start of new tariffs.

The USD/JPY price analysis shows a rebound in the safe-haven yen as traders increasingly worry about the looming Trump tariffs. However, trading remained thin as the dollar drifted amid uncertainty over the upcoming tariffs. Meanwhile, data from Japan revealed poor business sentiment amid the escalating global trade war.

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The yen has benefitted greatly from the uncertainty that has come with Trump’s tariff campaigns. Its safe-haven nature has allowed it to gain when most other currencies have collapsed. However, Japan is not an island when it comes to trade. The ongoing global trade will have a negative impact on Japan’s export-reliant economy. As a result, recent gains in the yen have been short-lived. Traders are increasingly worried about the economy and what it will mean for BoJ rate hikes. 

Notably, data on Tuesday revealed poor business sentiment among Japanese manufacturers in the three months to March. This was an early sign that the global trade tensions will impact Japan. 

On the other hand, the dollar drifted on Tuesday, ahead of the start of new tariffs. Market participants remain uncertain about which countries will suffer the levies and its impact on their economies. At the same time, fears of stagnation in the US have dampened appetite for the US currency.

USD/JPY key events today

• ISM Manufacturing PMI
• JOLTS Job Openings

USD/JPY technical price analysis: Bears gear up for a new low

On the technical side, the USD/JPY price is bouncing lower after retesting the 30-SMA resistance and the recently broken channel line. The price has remained below the SMA with the RSI under 50, suggesting a bearish bias. 

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The price recently broke below its bullish channel support, indicating a surge in bullish momentum. However, before continuing lower, it rebounded to retest the recently broken level. From there, bears must return to make a lower low and confirm a new downtrend. 

If this happens, the price will reach lower support levels, including the 148.25 and 146.75. On the other hand, bulls will take back control if the price fails to make a lower low. In this case, USD/JPY would break above the 30-SMA and the 151.01 resistance to make a new high and continue the bullish trend.

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