empty
09.07.2025 11:23 AM
USD/JPY. Analysis and Forecast

This image is no longer relevant

On Wednesday, the Japanese yen extended its decline for the third consecutive day, pushing the USD/JPY pair to a new two-week high above the key 147.00 level during the Asian session. The pressure on the yen is driven by concerns over the economic consequences of the 25% tariffs announced by U.S. President Donald Trump, now set to take effect on August 1, which affect Japanese goods. In addition, expectations that trade tensions will force the Bank of Japan to abandon plans to raise interest rates this year are also prompting capital outflows from the yen amid ongoing domestic political uncertainty.

Japanese Prime Minister Shigeru Ishiba stated on Tuesday that bilateral negotiations will continue with the goal of reaching a mutually beneficial trade agreement.

Meanwhile, escalating trade tensions are compounding problems for the Japanese economy, which contracted in the first quarter due to weak consumer spending, putting further pressure on the yen.

Recent media polls suggest that the Liberal Democratic Party (LDP) and its junior coalition partner Komeito may fail to secure a majority in the House of Councillors election on July 20. This could complicate trade negotiations and increase fiscal and political risks in Japan, adding to the yen's downward pressure.

Additionally, the strengthening of the U.S. dollar—supported by expectations that higher tariffs will drive inflation and compel the Federal Reserve to maintain elevated interest rates—also contributes to the upward momentum of USD/JPY.

However, dollar bulls are currently proceeding with caution, preferring to wait for new signals regarding the Fed's interest rate policy. According to the CME Group's FedWatch tool, markets are currently pricing in about 50 basis points of rate cuts by the end of the year, starting in October.

Today, traders should pay attention to the release of the FOMC meeting minutes during the U.S. session for potential trading opportunities. Any new signals regarding future Fed rate cuts could significantly impact dollar dynamics and provide fresh momentum for the USD/JPY pair.

From a technical standpoint, the USD/JPY pair closing above the 100-day Simple Moving Average (SMA) for the first time since February signals bullish intent. Oscillators on the daily chart remain in positive territory, though not yet in overbought zones, supporting the potential for further short-term growth toward intermediate resistance around 147.45–147.60, and possibly to the 148.00 level or the June high.

On the other hand, support lies at the Asian session low of 146.50, which currently limits immediate declines. Any downward correction is likely to be seen as a buying opportunity and may remain limited near the 100-day SMA breakout level, just below 146.00. A break below this level would shift the short-term trend in favor of the bears and could lead to deeper losses for the pair.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Summary
Urgency
Analytic
Irina Yanina
Start trade
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/NZD. Analysis and Forecast

The AUD/NZD pair gave up moderate intraday gains after setting a new four-week high in the 1.0982–1.0983 level, following the Reserve Bank of Australia's (RBA) monetary policy decision. Nevertheless, spot

Irina Yanina 12:29 2025-08-12 UTC+2

USD/CHF. Analysis and Forecast

On Tuesday, the USD/CHF pair drew the attention of sellers, partially halting the previous day's advance and setting a new weekly high. However, spot prices retreated only slightly from that

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

Trade Truce Extended for 90 Days

Yesterday, many investors and traders breathed a sigh of relief after U.S. President Donald Trump extended the pause on raising tariffs on Chinese goods for another 90 days, until early

Jakub Novak 11:17 2025-08-12 UTC+2

GBP rises in response to UK labor market data

The British pound has recovered all of yesterday's losses against the US dollar, maintaining the potential for the bullish trend observed last week to continue. According to the latest data

Jakub Novak 10:42 2025-08-12 UTC+2

US stock market has to tolerate rising inflation

One step forward, two steps back: the S&P 500 retreated after an initial rally. Investors are focusing on positives such as strong corporate earnings, the Fed's intention to cut rates

Marek Petkovich 10:18 2025-08-12 UTC+2

A Change in Market Trends Is Unlikely (there is a possibility of a limited resumption of the AUD/USD pair's decline and a rise in #USDX)

At last, the topic of Donald Trump's trade war has, at least for a while, moved into the background. It has not disappeared but has allowed other important events

Pati Gani 09:49 2025-08-12 UTC+2

What to Pay Attention to on August 12? A Breakdown of Fundamental Events for Beginners

There are quite a few macroeconomic releases scheduled for Tuesday. In the UK, important reports on unemployment, jobless claims, and wages will be published today. While we cannot say these

Paolo Greco 07:30 2025-08-12 UTC+2

GBP/USD Overview. August 12: Inflation That No Longer Decides Anything

The GBP/USD currency pair traded with very low activity on Monday. As we have already noted, the fundamental background remains strong and significant, but traders seem to have paused

Paolo Greco 03:32 2025-08-12 UTC+2

EUR/USD Overview. August 12: Never Happened Before – and Here We Go Again

On Monday, the EUR/USD currency pair continued to trade in an extremely calm manner. The macroeconomic background was absent for the second trading day in a row, and the market

Paolo Greco 03:32 2025-08-12 UTC+2

US Inflation Hasn't Even Started Accelerating Yet

US inflation for July may accelerate to 2.8% year-on-year. The corresponding report will be released tomorrow. If the forecasts are confirmed, this will mark the third consecutive month of growth

Chin Zhao 01:07 2025-08-12 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.