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

XAU/USD. Analysis and Forecast

Gold maintains a bearish tone today, though it has slightly recovered from the daily low, climbing back above the $3300 level. Investors continue to hope for a potential de-escalation

Irina Yanina 12:23 2025-04-25 UTC+2

The Market Has Nowhere Left to Run

While Donald Trump and Beijing are still trying to figure out whether trade negotiations between the U.S. and China are happening at all, the S&P 500 continues to climb

Marek Petkovich 11:57 2025-04-25 UTC+2

The U.S. Dollar Rises — Here's Why

The U.S. dollar strengthened against a number of global currencies, as did the U.S. stock market, following reports that the Chinese government is considering suspending its 125% tariffs on certain

Jakub Novak 11:31 2025-04-25 UTC+2

Why Could Gold Prices Drop Significantly? (There's a chance gold will continue to decline while the CFD on the NASDAQ 100 futures contract may rise)

The beginning of actual negotiations could lead to a significant drop in gold prices in the near future. In previous articles, I suggested that the previously surging price of gold

Pati Gani 10:14 2025-04-25 UTC+2

GBP/USD Overview – April 25: The Fed Is Starting to Worry for Real

The GBP/USD currency pair traded higher on Thursday, remaining near its 3-year highs. Despite the British pound's strong rally in recent months, corrections are still rare in the forex market

Paolo Greco 07:57 2025-04-25 UTC+2

EUR/USD Overview – April 25: America Files a Lawsuit Against Trump

The EUR/USD currency pair continued to trade calmly on Thursday, although volatility remained relatively high. This week, the US dollar showed some signs of recovery—something that could already be considered

Paolo Greco 07:57 2025-04-25 UTC+2

What to Pay Attention to on April 25? A Breakdown of Fundamental Events for Beginners

A few macroeconomic events are scheduled for Friday, but this doesn't matter, as the market continues to ignore 90% of all publications. Among the more or less significant reports today

Paolo Greco 07:06 2025-04-25 UTC+2

The Yen Is Looking Stronger and Stronger

The nationwide Consumer Price Index published last week showed accelerated core inflation in March—from 2.6% to 2.9%. Inflationary pressure is increasing, supporting the case for further interest rate hikes

Kuvat Raharjo 01:23 2025-04-25 UTC+2

Canada Awaits Election Results. USD/CAD Outlook

Last week, the Bank of Canada kept its interest rate unchanged at 2.75%, as expected. The accompanying statement was neutral in tone, emphasizing ongoing uncertainty. Confidence is hard to maintain

Kuvat Raharjo 00:59 2025-04-25 UTC+2

The Australian Dollar Could Suffer If the U.S.-China Trade War Escalates

U.S. President Donald Trump once again commented on Federal Reserve Chairman Jerome Powell, openly expressing dissatisfaction with the pace of rate cuts. Another public expression of disapproval of the Fed's

Kuvat Raharjo 00:59 2025-04-25 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.