USDJPY under pressure: Head and Shoulders signals a decline

The USDJPY rate is slightly strengthening, but sellers are aiming to break below the 145.65 support level. Find out more in our analysis for 7 April 2025.

USDJPY forecast: key trading points

• Japan's coincident index climbed to its highest level since September 2019
• Consumer confidence in Tokyo fell to its lowest point since March 2023
• Japan’s unemployment rate decreased to 2.4%
• USDJPY forecast for 7 April 2025: 143.15

Fundamental analysis

The USDJPY rate fluctuates near the 145.65 support level, remaining under pressure amid rising global trade tensions. The yen is supported by preliminary data that showed Japan’s coincident index rose to 116.9 in February 2025 from 116.1 a month earlier, marking the highest reading since September 2019 and signalling signs of economic recovery.

Meanwhile, consumer confidence during the same period dropped to its lowest since March 2023, reflecting persistent risks for domestic demand. Japan’s labour market saw unemployment fall to 2.4% amid a modest decline in employment levels.

Amid mounting external economic pressures, Japanese Prime Minister Shigeru Ishiba announced plans to travel to the US as soon as possible to present President Donald Trump with a comprehensive trade proposal. According to Ishiba, Tokyo is not seeking simple exemptions but rather aims to offer a detailed roadmap to resolve bilateral trade tensions.

USDJPY technical analysis

The USDJPY rate is in a consolidation phase, forming a Head and Shoulders pattern. Today’s USDJPY forecast suggests a downward impulse towards 143.15. Technical indicators confirm the bearish scenario, with Moving Averages pointing to a sustained downtrend and the Stochastic Oscillator rebounding from the resistance level, indicating growing selling pressure. A breakout below the lower boundary of the Head and Shoulders pattern will confirm the bearish scenario, with the price consolidating below 144.75.

Summary

The fundamental outlook remains mixed, but improving economic indicators and Japan's proactive foreign policy stance are supporting the yen amid sustained trade tensions. The USDJPY technical analysis shows that a Head and Shoulders pattern is forming, with the price likely to break below the support level and move down to 143.15.