empty
14.04.2025 12:31 PM
USD/JPY. Analysis and Forecast

This image is no longer relevant

The Japanese yen continues to strengthen, remaining near its highest levels of 2024. This is driven by growing demand for traditional safe-haven assets amid a weakening U.S. dollar caused by the escalation of the trade war between the U.S. and China. Optimism over a potential trade deal between the U.S. and Japan, along with expectations of further interest rate hikes by the Bank of Japan in 2025 due to signs of rising inflation in Japan, also supports the yen.

The Bank of Japan's hawkish outlook contrasts sharply with expectations of more aggressive policy easing by the Federal Reserve, keeping the U.S. dollar near its lows from 2022.

This creates the groundwork for a continued downward trend in the USD/JPY pair.

On Friday, China announced an increase in tariffs on U.S. goods to 125%, while President Trump raised tariffs on Chinese imports to 145%. These actions have sparked concerns over the economic fallout, pushing investors toward safer assets like the Japanese yen.

Investor sentiment is optimistic about a positive outcome from U.S.–Japan trade talks. Trump stated that "strict but fair parameters" are being set for negotiations, while U.S. Treasury Secretary Scott Bessent noted that Japan could become a top priority in tariff discussions—further boosting hopes for a trade deal.

Japanese Prime Minister Shigeru Ishiba warned that "U.S. tariffs could disrupt the global economic order," while Finance Minister Shunichi Kato added that excessive exchange rate volatility is undesirable. These comments highlight the importance of currency stability for both countries.

According to the Bank of Japan, annual wholesale inflation accelerated to 4.2% in March, giving the central bank room to continue raising interest rates. Conversely, U.S. consumer price index data points to slowing inflation, likely prompting the Fed to cut rates.

Diverging policy expectations between the Bank of Japan and the Federal Reserve are adding further support for the yen. With the U.S. dollar remaining weak, the USD/JPY pair is being dragged toward multi-month lows.

Technical analysis shows the daily Relative Strength Index (RSI) is approaching the oversold zone, which may require caution from sellers.

A short-term consolidation or modest pullback is likely necessary before the downtrend resumes. The 142.00 level serves as key support, with a break below it exposing intermediate support at 141.60, followed by the psychological 141.00 mark. Continued selling could push the pair down toward the 140.30 level, exposing the low from the September 2024 swing.

On the other hand, a recovery above 143.00 will face resistance in the 143.50–143.55 range. Further gains could lead to a test of the 144.00 level and beyond. A decisive breakout above this area would trigger short-covering rally momentum toward the psychological 145.00 level.

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

The USD/JPY pair is holding above the key 144.00 level amid continued weakness in the U.S. dollar. Strong household spending data released today in Japan has strengthened expectations

Irina Yanina 18:12 2025-07-04 UTC+2

NZD/USD. Analysis and Forecast

The NZD/USD currency pair is recovering after bouncing from the 0.6030 level, which marks a weekly low, and is attempting to gain further positive momentum. This suggests a break

Irina Yanina 18:08 2025-07-04 UTC+2

USD/CAD. Analysis and Forecast

On Friday, the USD/CAD pair remains near a three-week low, trading below the key 1.3600 level. The U.S. dollar is struggling to extend its gains following yesterday's stronger-than-expected Nonfarm Payrolls

Irina Yanina 17:59 2025-07-04 UTC+2

The Market Celebrates a Victory

Financial markets responded positively to the release of U.S. employment statistics for June. Payrolls rose by 143,000, exceeding Bloomberg analysts' forecasts. April and May figures were revised upward

Marek Petkovich 10:15 2025-07-04 UTC+2

Next Week May Begin on a Positive Note for the Markets (Possible Resumption of Growth in #SPX and #NDX)

The U.S. labor market data, published by the Department of Labor, instilled cautious optimism among investors, extending the rally in U.S. equity markets, supporting the dollar, and weakening gold prices

Pati Gani 10:09 2025-07-04 UTC+2

The Market is Preparing for Another Shock

Just yesterday, U.S. President Donald Trump announced that his administration would begin sending letters to trade partners on Friday, outlining unilateral tariff rates that, according to him, countries will

Jakub Novak 09:55 2025-07-04 UTC+2

Strong U.S. Employment Report Exceeds All Expectations

The U.S. dollar surged against a range of risk assets as the key figures in June's employment report convinced the Federal Reserve that there is no need to lower interest

Jakub Novak 09:49 2025-07-04 UTC+2

What to Pay Attention to on July 4? A Breakdown of Fundamental Events for Beginners

No macroeconomic reports are scheduled for Friday. As previously mentioned, today is a public holiday in the United States, known as Independence Day. All banks and stock exchanges will

Paolo Greco 07:59 2025-07-04 UTC+2

GBP/USD Overview – July 4: Reeves Cried — Did the Pound Collapse?

The GBP/USD currency pair also traded fairly calmly throughout Thursday until the start of the U.S. trading session. Recall that a day earlier, the British currency had plummeted by nearly

Paolo Greco 03:56 2025-07-04 UTC+2

EUR/USD Overview – July 4: Trump's Third Trade Deal Didn't Help the Dollar Either

The EUR/USD currency pair traded very calmly throughout Thursday, until unemployment and labor market reports were released in the United States. However, we will discuss those reports in other articles

Paolo Greco 03:56 2025-07-04 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.