Bearish sentiment on USDJPY intensifies amid escalation of trade conflict

USDJPY rate is falling, bears have settled below key support. Current quote – 143.69. Details – in our analysis for 1 July 2025.

USDJPY forecast: key trading points

• Trade tensions between the US and Japan have resumed
• Trump threatened new tariffs on Japanese goods
• Japan’s economy shows signs of resilience
• USDJPY forecast for 1 July 2025: 142.15

Fundamental analysis

The USDJPY rate is declining for the second consecutive day. On Tuesday, sellers broke through the key support level of 143.75, which strengthened the bearish momentum for the US dollar.

The American currency came under pressure due to renewed trade tensions between the US and Japan. President Donald Trump criticised Tokyo for refusing to import American rice and threatened to impose new tariffs. He also confirmed the continuation of the 25% tariff on Japanese cars, citing the persistent trade imbalance.

Domestically, Japan’s economy shows signs of resilience. The latest Bank of Japan Tankan survey showed an unexpected improvement in business sentiment among large manufacturers in Q2, despite external challenges and geopolitical risks.

As part of the USDJPY forecast for today, such data strengthens bearish sentiment on the pair, increasing the likelihood of further depreciation.

USDJPY technical analysis

The USDJPY rate maintains a downtrend within a short-term bearish channel. After breaking below the lower boundary of the long-term upward channel and consolidating below the 65-period Moving Average, selling pressure intensified. At the moment, quotes are consolidating near the resistance level of 143.75, while the overall direction remains bearish. The USDJPY forecast indicates a high probability of decline towards 142.15. The Stochastic Oscillator shows a reversal downwards and remains below the descending trend line, confirming prevailing bearish sentiment. A break below 142.85 will become an important technical signal in favour of continued decline to the next target at 142.15.

Summary

The fundamental background increases pressure on the US dollar and supports continued bearish sentiment. USDJPY technical analysis indicates a likely break below 142.85, which will confirm the bearish scenario and open the path for a fall to 142.15.