The USDJPY rate continues to decline, with even disappointing macroeconomic data from Japan not preventing the yen from strengthening. Find more details in our analysis for 16 May 2025.
USDJPY forecast: key trading points
- Japan's economy contracted by 0.2% quarter-on-quarter in Q1 2025
- Industrial production in Japan rose by 0.2% month-on-month in March
- USDJPY forecast for 16 May 2025: 148.05
Fundamental analysis
The USDJPY rate is falling despite macroeconomic data from Japan coming in weaker than expected. The country’s economy contracted by 0.2% in Q1 2025 compared to the previous quarter, below the forecast of -0.1%, marking the first decline in a year.
However, the Bank of Japan reiterated this week that it expects further wage and price growth, reinforcing its commitment to gradually tightening monetary policy.
Additional support for the yen came from revised industrial production data, which showed a 0.2% month-on-month increase in March, reversing the preliminary estimate of a 1.1% decline.
The USDJPY forecast remains bullish.
USDJPY technical analysis
The USDJPY rate is rebounding from the lower boundary of the bullish channel, with the potential to form a Wedge reversal pattern.
Today’s USDJPY forecast expects a bounce from the channel’s lower boundary and an upward move towards the 148.05 level. The Stochastic Oscillator confirms the bullish scenario: it is turning from the oversold area, and a bullish divergence is forming.
A breakout above the upper boundary of the Wedge pattern and consolidation above the 145.65 level would confirm the upward move.
Summary
Despite weak GDP figures, the yen remains supported by expectations of BoJ policy tightening and a surprise rise in industrial production. USDJPY technical analysis indicates signs of recovery with a potential upside to 148.05, provided the price breaks above 145.65.
Bullish
