USD/JPY Forecast and News
USD/JPY rises beyond 147.50 amid a broadly firmer US Dollar
The US Dollar is reverting to the previous two days' losses as investors welcomed reports suggesting that Fed Governor Waller is emerging as a top candidate for the replacement of Chair Powell in May, while a moderate risk appetite is weighing on the safe-haven Yen. Waller is a dove and was appointed by Trump during his first term.
Latest Japanese Yen News
USD/JPY Technical Overview
From a technical perspective, spot prices remain confined in the weekly trading band. Against the backdrop of last week's sharp pullback from the 151.00 neighborhood, or the highest level since March 28, the range-bound price action might still be categorized as a bearish consolidation phase. Moreover, slightly negative oscillators on the daily chart suggest that the path of least resistance for the USD/JPY pair is to the downside.
Hence, any further move up might continue to attract fresh sellers and remain capped near the 147.75-147.80 region, representing the 38.2% Fibonacci retracement level of the upswing in July. That said, some follow-through buying, leading to a subsequent strength beyond the 148.00 mark, could lift the USD/JPY pair to the 148.45-148.50 region. The momentum could extend further towards the 23.6% Fibo. retracement level, just ahead of the 149.00 mark.
On the flip side, the 146.75-146.70 confluence – comprising the 200-period Simple Moving Average (SMA) on the 4-hour and the 50% Fibo. retracement level – might continue to protect the immediate downside. A convincing break below should pave the way for deeper losses and drag the USD/JPY pair to sub-146.00 levels, or the 61.8% Fibo. retracement level. Some follow-through selling below the latter could expose the 145.00 psychological mark.
Fundamental Overview
US Data released on Thursday revealed that Jobless claims rose to 226,000 on the previous week, above the 221,000 claims expected, following a 218,000 reading in the previous week.
Somewhat later, the St. Louis Fed President delivered a cautious message warning about the threat of tariffs to US inflation and to the economy, and pointed to only one rate cut in the rest of the year. Futures markets, however, keep pricing a rate cut in September and another one before the end of the year.
In Japan, the BoJ's summary of opinions, also released on Thursday, revealed that some policymakers remain wary about the impact of US tariffs on Japan’s economy, which might take two to three months to be assessed. These comments have cooled hopes for immediate rate cuts.
Japanese Yen sticks to negative bias amid positive risk tone, BoJ rate hike uncertainty
The Bank of Japan published the Summary of Opinions of its July 30-31 meeting earlier this Friday, which showed that board members maintained their view for further interest-rate increases despite high uncertainty over tariffs. The summary further revealed that Japan's economic growth will moderate, and the improvement in underlying inflation will be sluggish temporarily.
Earlier, the Ministry of Internal Affairs and Communications reported that Japan's Household Spending rose in June at a slower rate than expected as higher prices added pressure to broader consumption trends. Consumer spending fell 5.2% on a monthly basis, marking the steepest decline since January 2021, suggesting that prospects for BoJ rate hikes could be delayed further.
Japan's Topix index rose above the 3000 psychological mark for the first time ever, while the tech-focused Nikkei 225 rallied to its highest since July 25. This, in turn, prompts some selling around traditional safe-haven assets, including the Japanese Yen. Apart from this, a modest US Dollar recovery assists the USD/JPY pair to rebound around 60-70 pips from the Asian session low.
Any meaningful USD appreciation, however, seems elusive amid bets that the Federal Reserve will resume its rate-cutting cycle in September. The expectations were reaffirmed by the US Weekly Initial Jobless Claims data released on Thursday, which rose more than expected last week to the highest level in a month. This further pointed to signs of a cooling US labor market.
Moreover, concerns about the Fed's independence might contribute to capping gains for the USD and the USD/JPY pair. Meanwhile, US President Donald Trump nominated Council of Economic Advisers Chairman Stephen Miran to serve out the rest of Fed Governor Adriana Kugler's term and has short-listed four candidates as replacements for Fed Chair Jerome Powell.
Moving ahead, there isn't any relevant market-moving economic data due for release from the US on Friday, leaving the USD at the mercy of speeches from influential FOMC members. Apart from this, the broader risk sentiment could provide some impetus heading into the weekend. Nevertheless, the mixed fundamental backdrop warrants caution for aggressive USD/JPY traders.
Latest JPY Analysis
Editors' picks
EUR/USD trims losses, back above 1.1650
EUR/USD remains slightly on the back foot on Friday, trading around 1.1650 amid some modest recovery in the US Dollar. Investors, in the meantime, are expected to shift their attention to next week's US inflation data release. Fed officials' comments and trade news also remain in focus.
GBP/USD turns positive near 1.3450
GBP/USD now flirts with the 1.3450 zone, managing to bounce off daily lows as the Greenback’s advance loses some traction. The British Pound remains bolstered by the BoE's hawkish cut at its meeting on Thursday. Cable remains en route to close the week with marked gains.
Gold keeps the rangebound mood near $3,400
Gold seems to have entered a consolidation phase around $3,400 per troy ounce, giving up some gains after previous highs over $3,410. The announcement that the United States would tax one-kilo and 100-ounce gold bars is also supportive of the precious metal.
Crypto Today: Bitcoin uptrend takes a breather as Ethereum, XRP bulls tighten grip
The cryptocurrency market is relatively bullish on Friday, buoyed by renewed risk-on sentiment from both institutional and retail investors. Bitcoin surged toward the $118,000 round-figure resistance before retreating slightly to trade at around $116,525 at the time of writing.
Bank of England cuts rates in dramatic meeting
The Bank of England has cut rates by a further 25 basis points to 4% but the statement hints that officials think the easing cycle is nearing its end. Policymakers are visibly worried about a more persistent bout of inflation as the headline number is way higher than target.
Majors
Cryptocurrencies
Signatures
USD/JPY YEARLY FORECAST
How could USD/JPY move this year? Our experts make a USD/JPY update forecasting the possible moves of the yen-dollar pair during the whole year.
USD/JPY FORECAST 2025
In the USD/JPY 2025 Forecast , FXStreet analyst Yohay Elam indicates that USD/JPY is likely to start the year bearish due to fears of trade wars, Donald Trump's entry into the White House and expected Federal Reserve (Fed) rate cuts. However, a bullish turnaround is anticipated in the following months as Trump's trade deals stabilize global markets, weakening the safe-haven Yen. Further gains are expected in the latter half of the year, driven by a more hawkish Fed and disappointment in the Bank of Japan’s (BoJ) inaction on rate hikes.
From a technical point of view, USD/JPY remains in a long-term uptrend for 2025, supported by its position above the 50-week SMA. Key resistance levels include 156.97, 161.81, and 170.43, with the latter aligning with the 138.2% Fibonacci extension. On the downside, support lies at 147.54, 139.73, and further down at 136.72 and 127.15.
MOST INFLUENTIAL FACTORS IN 2025 FOR USD/JPY
The year will be politically marked by Trump’s return to the White House. A Republican government is seen as positive for financial markets, but Trump’s pledge to cut taxes and impose tariffs on foreign goods and services may introduce uncertainty to both the political and economic landscape.
In Japan, political uncertainty looms, as the ruling Liberal Democratic Party (LDP) lacks a parliamentary majority and may call fresh elections. An LDP victory could strengthen the Yen by ensuring stability, while opposition gains might lead to fiscal expansion and weaken the currency. If no elections occur, a modest budget would likely keep the Yen supported.
In terms of monetary policy, the Fed and BoJ are set to diverge in monetary policy. The Fed expects to deliver only two additional rate cuts in 2025, the BoJ is expected to maintain its dovish stance, avoiding rate hikes amid weak inflation and a shrinking economy, leaving the Yen vulnerable to market disappointment over policy inaction.
Influential Institutions & People for the USD/JPY
The US Dollar Japanese Yen can be seriously affected by news or the decisions taken by two main central banks:
The Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website , on X and Facebook
The Bank of Japan (BOJ)
The Bank of Japan (BoJ) is the central bank of Japan. Established under the Bank of
Japan Act in 1882, it is a juridical entity and neither a government agency nor a private corporation. The BoJ
sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary
control to ensure price stability, which means an inflation target of around 2%.
Policy Board: The Policy Board is the bank's highest decision-making body. It determines the
guidelines
for currency and monetary control, sets the basic principles for carrying out the bank's operations and oversees
the performance of the bank's officers, excluding auditors and counselors.
History: The Bank of Japan was established under the Bank of Japan Act, promulgated in June
1882, and began operating as the nation's central bank on October 10, 1882. It was reorganized in 1942 under the
Bank of Japan Act of 1942,
which reflected the wartime context. The Act of 1942 was amended several times after World War II, and the
establishment of the Policy Board as the bank's highest decision-making body occurred in June 1949. In June
1997, the Act of 1942 was revised completely under the principles of independence and transparency. The revised
Act came into effect on April 1, 1998.
The official website , on X and YouTube
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
Kazuo Ueda
Kazuo Ueda was born in Makinohara, Japan, on September 20, 1951. He is the 32nd and current Governor of the BoJ. He graduated from the University of Tokyo with a Bachelor of Science and Mathematics and received a PhD in economics from the Massachusetts Institute of Technology (MIT).
He is a professor emeritus at the University of Tokyo and also worked as a professor at Kyoritsu Women's University. In February 2023, former Prime Minister Fumio Kishida nominated Ueda as the governor of the BoJ. He is widely regarded as an expert on monetary policy but was considered a surprise appointment by analysts. He wasn’t even considered a dark-horse candidate, as the BoJ governor role has traditionally gone to long-serving Finance Ministry bureaucrats or central bank officials. Ueda is the first academic economist to lead the BoJ in the post-World War II era.
Ueda’s Wikipedia profile
BOJ NEWS & ANALYSIS
FED NEWS & ANALYSIS
About USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States. As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a term used t o describe the most important currency pairs in the world. This group also includes GBP/USD, USD/JPY, AUD/USD , USD/CHF, NZD/USD and USD/CAD . The popularity of the Euro Dollar pair stems from its representation of two of the world’s largest economies: the Eurozone and the United States.
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.