Japanese Yen Edges Lower as Weak Data Dampens Confidence

Key factors driving USD/JPY Movement

March’s economic data revealed a larger-than-expected contraction in industrial production, while retail sales growth also fell short of forecasts. Collectively, these indicators point to potential challenges for Japan’s economy.

Market focus now shifts to the upcoming Bank of Japan (BoJ) meeting, where the central bank is widely expected to hold interest rates steady at 0.5%.

The BoJ’s commentary will likely remain cautious as policymakers assess the potential fallout from new US tariffs on Japan’s export-reliant economy.

In a recent development, US Treasury Secretary Scott Bessent noted that the Trump administration has extensively discussed a potential trade agreement with Japan – a sign that bilateral tensions may be easing.

Technical analysis: USD/JPY

On the H4 chart, USDJPY has broken below the 142.75 level and continues to decline towards 141.56. This move is considered a correction within the broader upward trend. Once this correction ends, a new bullish wave towards 144.00 may begin. A breakout above 144.00 could pave the way for a further rise towards the local target of 146.40. Technically, this scenario is supported by the MACD indicator, as its signal line is below zero and sloping decisively downwards.

On the H1 chart, USDJPY is consolidating around the 142.30 level. A rise towards 142.75 is possible today, followed by a decline to 141.67, which marks a local target for the corrective move. Technically, this scenario is confirmed by the Stochastic oscillator, whose signal line is above 80 and preparing to reverse towards 20.

Conclusion

The yen remains under pressure amid a lacklustre economic performance while traders await fresh cues from the BoJ. While a technical rebound appears likely after the correction, the pair’s near-term trajectory will hinge on trade developments and US tariff policy.

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.