US dollar vs Japanese yen: weak trend strength triggers neutral bias and minor downside

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Us dollar vs yen slips 0.11% today

Highlights

Japan's government raised its fiscal 2025 GDP growth forecast to 1.1%, citing stronger private consumption and capital investment as key drivers.
Authorities expect the US dollar to average 150.8 yen in fiscal 2025 and 155.2 yen in fiscal 2026, both higher than previous assumptions.
The Bank of Japan signaled readiness to intervene in currency markets if yen weakness persists, influencing current USD/JPY movements.

Upgraded growth targets and intervention risk bolster dollar outlook

Japan's government has revised its fiscal 2025 economic growth forecast upward to 1.1%, attributing the improvement to stronger private consumption and capital investment. The yen is expected to remain weak, and the authorities project the US dollar to average 150.8 yen in fiscal 2025 and 155.2 yen in fiscal 2026, exceeding previous assumptions. Additionally, the Bank of Japan has indicated a readiness to intervene in currency markets if yen weakness persists, which is influencing current USD/JPY movements.

Mixed momentum and weak trend as volatility slips

Momentum signals are mixed: daily MACD and RSI both point to underlying buying interest, but a low ADX (13.37) indicates weak trend strength. Oscillator signals offer no clear direction, with Stoch RSI and CCI hovering near neutral and BBP reflecting mild seller dominance (an oversold condition), while the Awesome Oscillator stands neutral. The pair slipped 0.11% since the previous session, opening with a slight gap lower and remaining close to today's high within a moderate intraday range (¥155.66 – ¥156.03). Overall, price action suggests low volatility with a neutral to slightly negative bias, while current momentum signals are inconclusive.

Upside favored as trading range tightens amid consolidation risk

For the next five trading days, typical volatility may keep USD/JPY within a band of ¥155.34 to ¥157.30. There is a high probability (more than 80%) of a price increase, with downside considered less likely. The base case sees the pair consolidating sideways above ¥155.34 and below ¥157.30. A sustained move above ¥157.30 could trigger fresh upside momentum, while a drop under ¥155.34 could invite renewed selling.

Viktoras Karapetjanc, expert at Traders Union, sees USD/JPY maintaining its medium- and long-term bullish structure despite short-term uncertainties. He notes that Japan's upgraded economic outlook and persistent yen weakness support a constructive stance, while the Bank of Japan's intervention risks add a layer of short-term caution. Current signals are mixed, but the analyst expects the pair to consolidate above ¥155.34 with more than 80% probability of upside in the near-term. Price action may remain subdued, yet the fundamental and macro backdrop favor higher levels. "I believe ongoing yen softness and strong U.S. momentum should keep USD/JPY biased upward as long as key supports are respected."

Previously it was reported that USD/JPY is consolidating just below short-term moving averages, with mixed momentum signals as low volatility limits clear directional moves. Despite short-term selling pressure and neutral oscillators, medium- and long-term trends remain bullish, with key support at ¥156.07 and ¥155.55 and upside potential if price breaks above the ¥156.00–¥156.10 resistance zone.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.