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

USD/JPY. Analysis and Forecast

During the European session on Thursday, the Japanese yen maintained stability, allowing the USD/JPY pair to hold above the key 143.00 level amid a moderate rise in the U.S. dollar

Irina Yanina 12:04 2025-06-05 UTC+2

AUD/JPY. Analysis and Forecast

Today the AUD/JPY pair is attracting new buyers. Recent Chinese data, including the private Caixin survey, showed a moderate acceleration in growth in China's services sector

Irina Yanina 11:36 2025-06-05 UTC+2

USD/CAD. Analysis and Forecast

The USD/CAD pair continues to decline. Fundamental factors support bearish sentiment, indicating that the path of least resistance for spot prices remains downward. Reports of a trade agreement between

Irina Yanina 11:33 2025-06-05 UTC+2

The Market Finds Good in the Bad

Markets have risen for the third consecutive day, interpreting the current situation as widespread trading uncertainty — far from a market crash. This allows for a calmer and more rational

Marek Petkovich 09:20 2025-06-05 UTC+2

What to Pay Attention to on June 5? A Breakdown of Fundamental Events for Beginners

There are very few macroeconomic reports scheduled for Thursday. Only two secondary reports from the UK and the US are all traders will get today. The construction sector activity report

Paolo Greco 06:39 2025-06-05 UTC+2

GBP/USD Overview – June 5: Britain Is America's Best Friend, but Still Has to Pay

The GBP/USD currency pair traded rather calmly on Wednesday, as there were few important events and reports during the day. As we expected, the business activity indices (excluding ISM)

Paolo Greco 03:52 2025-06-05 UTC+2

EUR/USD Overview – June 5: Trump Will Continue Pressuring the EU

The EUR/USD currency pair traded very calmly on Wednesday. As we mentioned yesterday, there was no reason to expect the business activity indices to influence trading — especially the European

Paolo Greco 03:52 2025-06-05 UTC+2

Trump Once Again Fails to Persuade Powell

Donald Trump and Jerome Powell held a meeting at the White House last week. This news went largely unnoticed due to the scant details provided. Only general information about

Chin Zhao 00:38 2025-06-05 UTC+2

EUR/USD. June ECB Meeting: Preview

On Thursday, the European Central Bank will announce the results of its next meeting. Although the formal outcomes of the June meeting are virtually predetermined, the future prospects for further

Irina Manzenko 00:38 2025-06-05 UTC+2

The Dollar Returns to the Battlefield

When there is no unity among allies, things don't go smoothly. Following mutual accusations between the U.S. and China, Donald Trump commented that Xi Jinping is a very tough

Marek Petkovich 00:38 2025-06-05 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.