USDJPY is strengthening amid BoJ action uncertainty

The USDJPY rate reached the key 153.75 resistance level. Discover more in our analysis for 12 February 2025.

USDJPY forecast: key trading points

• Kazuo Ueda reiterated maintaining a loose policy despite rising inflation in Japan
• Federal Reserve Chairman Jerome Powell stated that the regulator is in no rush to lower interest rates, which supports the US dollar
• The yen is under pressure due to Trump’s tariff policy, which could strengthen the US dollar and weaken other currencies
• USDJPY forecast for 12 February 2025: 152.15 and 151.15

Fundamental analysis

The USDJPY rate is rising for the third consecutive trading session as the Japanese yen weakens amid no clear signal from the Bank of Japan’s governor on the future interest rate trajectory.

Kazuo Ueda told parliament that the BoJ will continue to pursue a loose monetary policy to achieve sustainable 2% inflation. Meanwhile, the latest data showed that Japan’s annual inflation accelerated to 3.6% in December 2024, up from 2.9% a month earlier, marking the highest level since January 2023.

The US dollar receives additional support from the stance of Federal Reserve Chairman Jerome Powell, who reiterated in the first part of his two-day testimony to Congress that the regulator was in no rush to start an interest rate-cutting cycle.

The Japanese yen also remains under pressure due to external factors, including US President Donald Trump’s intensified tariff policy. Investors expect the new tariffs to strengthen the US dollar, changing the structure of global trade flows and forcing other countries to weaken their currencies to offset tax costs.

USDJPY technical analysis

The USDJPY rate remains within the descending channel despite an aggressive bullish correction. Buyers have encountered the key 153.75 resistance level. Additionally, the currency pair is rebounding from the upper boundary of the descending channel, which increases the likelihood of a reversal.

The EMA-65 and EMA-285 Moving Averages confirm the bearish trend. The bulls are now attempting to gain a foothold above the EMA-285, which may indicate mounting pressure from buyers. However, within the current trend, there have already been attempts to breach this line, followed by a decline.

The Stochastic Oscillator is in the overbought area, signalling a high probability of a downward movement. The signal will be confirmed by the intersection of the %K и %D lines from top to bottom.

The USDJPY forecast for today suggests a rebound from the 153.75 resistance level and a decline to 151.15. This scenario will be confirmed if the sellers break below the lower boundary of the corrective channel, with the price consolidating below 152.15. An alternative scenario is possible if the price breaks above the upper boundary of the long-term descending channel and secures above 154.00, opening the door for growth to 155.45.

Summary

The USDJPY rate continues to rise, supported by the lack of a clear signal from the Bank of Japan and the Fed’s interest rate policy. The USDJPY technical analysis confirms the persistent downtrend, with a rebound from the 153.75 resistance level and the Stochastic Oscillator overbought area increasing the likelihood of a decline to 152.15 and 151.15. Price consolidation above the 154.00 resistance level could break the downward structure, paving the way for growth to 155.45.