USD/JPY Price Analysis – April 17, 2025
Daily Price Outlook
During the early European trading session on Thursday, the USD/JPY pair remained steady above the 142.61 level, supported by modest US dollar strength and a continued bearish bias in the Japanese Yen.
The pair managed to hold firm despite the mixed market sentiment, global trade uncertainty, and diverging central bank outlooks, with traders closely monitoring developments from both sides of the Pacific.
Global Risk Appetite Weighs on Yen Amid Ongoing Trade and Economic Concerns
However, the recent uptick in global risk appetite, driven by optimism over potential tariff negotiations and easing trade tensions, has undermined traditional safe-haven assets like the Japanese Yen. Asian equity markets and US futures edged higher on Thursday, following a tech-led slump on Wall Street.
However, ongoing concerns around US President Donald Trump’s aggressive tariff measures, escalating US-China tensions, and fears of a global economic slowdown continue to cap overall optimism.
BoJ Rate Hike Speculation and Trade Talks with the US Support Yen Outlook
On the flip side, expectations that Japan might strike a trade deal with the US and that the Bank of Japan (BoJ) could raise interest rates at some point are helping to prevent bigger losses in the Yen.
However, the cautious outlook has been reinforced by comments from BoJ Governor Kazuo Ueda, who mentioned that the central bank might pause its rate hikes if US tariffs hurt Japan’s economy.
Moreover, the reports from Reuters suggest that the BoJ is expected to lower its growth forecasts at the upcoming policy meeting due to growing risks linked to trade. These factors are keeping the Yen from falling too sharply against the US Dollar.
Furthermore, Japan's Prime Minister Shigeru Ishiba and Economy Minister Ryosei Akazawa have indicated progress in talks with the US, with more meetings planned and a strong hope for a deal within the next 90 days.
Meanwhile, BoJ board member Junko Nagakawa also took a more hawkish stance, stating that the central bank will keep tightening its policies if inflation and economic activity continue on their current path. This adds to the overall outlook of gradual economic adjustments in Japan.
USD/JPY Traders Eye Fed Signals Amid Sticky Inflation and Hawkish Powell Comments
On the US side, the US dollar recovered some ground after Fed Chair Jerome Powell pushed back on immediate rate cut expectations, citing sticky inflation and economic uncertainty tied to new tariffs.
His comments came alongside a stronger-than-expected 1.4% rise in US retail sales for March, reinforcing the view that the Fed may stay on hold for longer.
Despite Powell's hawkish tone, markets are still pricing in at least three rate cuts this year due to concerns over a tariff-driven economic slowdown.
Recent developments in the US-China trade war — including new restrictions on AI chip exports and retaliatory Chinese tariffs — have only added to the uncertainty.
With mixed cues from both the Fed and BoJ, traders now turn their focus to upcoming US macro data, including jobless claims and the Philly Fed Manufacturing Index, for fresh short-term direction in the USD/JPY pair.
USD/JPY – Technical Analysis
USD/JPY is attempting to recover after briefly dipping below the 142.15 support zone, with price now testing both horizontal and descending trendline resistance near 142.95.
The pair remains within a broader downtrend but has shown signs of stabilizing near recent lows. A breakout above the 143.20 level could shift short-term momentum to the upside, opening room toward 144.31 — a key horizontal resistance.
The 50-period Simple Moving Average (SMA) at 142.95 is currently acting as dynamic resistance. Price is attempting to push above this barrier, and any sustained break would suggest a change in directional bias.
Meanwhile, the RSI has climbed to 49.3, recovering from sub-40 levels. Though not signaling strong momentum yet, it reflects improving sentiment.
The key trigger level for bullish continuation is 143.20. A clean break above this level would confirm a breakout from the descending trendline and a potential bullish reversal pattern. If confirmed, the next upside level to monitor is 144.31, followed by 145.15.
On the flip side, failure to break higher and a drop below 142.15 would reinforce the prevailing downtrend and bring 142.03 and 140.84 back into focus.
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