The increase in Tokyo’s core CPI may halt a corrective wave, pushing the USDJPY pair lower to the 142.70 support level.
Find out more in our analysis for 25 April 2025.
USDJPY forecast: key trading points
- Tokyo core CPI: previously at 2.4%, currently at 3.4%
- US Michigan inflation expectations: previously at 5.0%, projected at 6.7%
- USDJPY forecast for 25 April 2025: 145.40 and 142.70
Fundamental analysis
The core Consumer Price Index (core CPI) is a key indicator of price dynamics for goods and services from the consumer’s perspective. The index is calculated specifically for Tokyo and provides early insight into Japan’s inflation trends.
Fundamental analysis for 25 April 2025 takes into account that the actual Tokyo core CPI rose to 3.4% in March compared to the previous period, indicating a rise in living standards.
Meanwhile, according to the forecast for 25 April 2025, the University of Michigan’s US inflation expectations could increase to 6.7%, continuing their upward trajectory over the past two reporting periods. Weaker-than-expected actual data could indicate growing economic instability in the US and support a stronger yen, putting downward pressure on the USDJPY pair.
USDJPY technical analysis
Having tested the lower Bollinger band, the USDJPY price has formed a Hammer reversal pattern on the H4 chart. At this stage, it continues to form a corrective wave following the pattern signal. Since the quotes continue to rise within a descending channel, the pair will likely continue its downward momentum after a correction.
The target for a pullback is the 145.40 level. A rebound from this level may open the potential for a decline.
However, the USDJPY forecast for today also takes into account another scenario, where the price dips to 142.70 without testing the resistance level.
Summary
The sharp rise in Tokyo’s core CPI points to growing inflationary pressure in Japan, supporting a stronger yen. Simultaneously, deteriorating University of Michigan US inflation expectations may further undermine the dollar. The USDJPY technical analysis suggests a correction towards 145.40, followed by a decline.
