Japanese yen declines: temporary pause amid strong long-term outlook

USD/JPY climbed to 148.19 on Wednesday, marking its second consecutive session of gains after touching a low of 146.53, its weakest level since 4 October 2024. While this movement partly resembles a technical rebound, broader market conditions appear to shift, influencing the yen’s trajectory.
RoboForex | 120 ngày trước

Key market factors affecting USD/JPY

Bank of Japan (BoJ) Governor Kazuo Ueda stated that it is natural for bond yields to reflect market expectations regarding short-term interest rates. He downplayed the significance of any divergence between the BoJ’s stance and market sentiment.

Despite this, financial markets continue to bet on the BoJ sticking to its interest rate hike strategy for 2025. Japan’s latest inflation data further strengthens this view.

The Consumer Price Index (CPI) for January 2025 surged to 4.0%, the highest since January 2023. The primary driver was food prices, which spiked 7.8% y/y, while rising electricity and gas prices also contributed to overall inflation. Meanwhile, core inflation hit a 19-month high at 3.2%.

Given this inflationary environment, the BoJ remains pressured to maintain its tightening cycle, a strong supporting factor for the yen over the longer term.

Technical analysis of USD/JPY

On the H4 chart, USD/JPY is developing a growth wave targeting 148.38. After reaching this level, a correction towards 147.34 may follow, outlining the consolidation range at the recent lows. If the price breaks upwards, the pair could extend gains towards 150.20, the next key resistance level. A correction to 148.38 could then occur. The MACD indicator supports this outlook, with its signal line below zero but pointing strictly upwards, indicating bullish momentum.

On the H1 chart, the pair is forming a growth wave towards 148.38, marking the first key target. A potential pullback to 147.34 may follow before a renewed push higher towards 149.40, the next local target. The Stochastic oscillator confirms this scenario, with its signal line above 50 and trending upwards, suggesting continued buying pressure.

Conclusion

USD/JPY is experiencing a short-term rebound, with market sentiment driving the pair higher amid shifting rate expectations. However, the BoJ’s stance and Japan’s strong inflation figures provide longer-term support for the yen, keeping the broader outlook mixed.

In the near term, 148.38 remains a key resistance level, with the potential for further gains towards 150.20 if bullish momentum persists. A corrective pullback to 147.34 could provide a buying opportunity before the next upward wave towards 149.40. Market participants will closely watch economic developments and BoJ policy signals to determine the yen’s next move.

Disclaimer

Any forecasts contained herein are based on the author's particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

read more
Dollar Dominates After Trump’s Trade Strike| 11th July, 2025

Dollar Dominates After Trump’s Trade Strike| 11th July, 2025

On July 10, silver extends gains toward $36.50 amid rising macro uncertainty and safe-haven demand. The US Dollar weakens, boosting AUD and NZD. USD/JPY trims early losses as BoJ hike hopes fade, while EUR/JPY retreats from highs on softening sentiment. Markets brace for US Jobless Claims to guide the next leg in global risk and Fed rate expectations.
Moneta Markets | 2h 1phút trước
ATFX Market Outlook 11th July 2025

ATFX Market Outlook 11th July 2025

U.S. stock indices, the S&P 500 and Nasdaq, closed slightly higher on Thursday, both reaching new record closing highs. Optimism was boosted by Delta Air Lines' positive earnings forecast and Nvidia's record-breaking market capitalisation, helping investors remain unfazed by Trump’s latest tariff announcements.
ATFX | 5h 19phút trước
ATFX Market Outlook 10th July 2025

ATFX Market Outlook 10th July 2025

U.S. President Donald Trump announced new tariffs on seven countries, stating earlier this week that a 25% tariff would be imposed on Japan and other trade partners starting in August. Despite this, Wall Street closed higher on Wednesday, with the tech-heavy Nasdaq leading the gains.
ATFX | 1 ngày trước
ATFX Market Outlook 9th July 2025

ATFX Market Outlook 9th July 2025

On Tuesday, U.S. President Donald Trump escalated the global trade war by announcing a 50% tariff on imported copper and reiterated that long-threatened tariffs on semiconductors and pharmaceuticals are also imminent. U.S. equities ended mixed as investors awaited further clarity on trade policy. The Dow Jones Industrial Average fell 0.37%, the S&P 500 dipped 0.07%, while the Nasdaq edged up 0.03%
ATFX | 2 ngày trước
Central Bank Outlook and Trade Shift Sentiment | 8th July, 2025

Central Bank Outlook and Trade Shift Sentiment | 8th July, 2025

On July 8, gold slips below $3,350 as risk appetite improves. Silver holds steady near $36.90, while AUD/USD rises to 0.6855 ahead of the RBA decision. USD/JPY surges above 161.00 as BoJ tightening bets fade. PBOC sets USD/CNY at 7.1534, signaling stability. Focus now shifts to US CPI, central bank guidance, and trade progress for market direction.
Moneta Markets | 3 ngày trước
ATFX Market Outlook 8th July 2025

ATFX Market Outlook 8th July 2025

U.S. President Trump signed an order delaying “reciprocal” tariffs from July 9 to August 1 and warned of steep hikes from that date, escalating trade tensions. U.S. stocks closed sharply lower, with the Dow down 0.94%, the S&P 500 falling 0.79%, and the Nasdaq dropping 0.92%. Tesla also tumbled after Elon Musk announced plans to launch a new political party.
ATFX | 3 ngày trước