USD/JPY Price Analysis – April 24, 2025
Daily Price Outlook
During the European session on Thursday, the USD/JPY currency pair struggled to maintain its upward momentum, facing resistance around the 142.39 level.
However, the Japanese Yen (JPY) gained strength amid renewed safe-haven demand, driven by global uncertainties, including geopolitical tensions and the policy divergence between the Federal Reserve (Fed) and the Bank of Japan (BoJ).
While the Fed continues tightening, the BoJ maintains its accommodative stance, supporting JPY demand and putting downward pressure on the USD/JPY pair.
Geopolitical Uncertainty and Trade Concerns Drive JPY’s Safe-Haven Demand
However, the recent developments in US-China trade relations have been a key factor supporting the JPY's safe-haven appeal. US President Donald Trump's remarks on tariffs have dampened optimism for a quick resolution to the trade standoff. Trump hinted that the 145% tariffs on Chinese imports might be reduced significantly in the future.
Nevertheless, Treasury Secretary Scott Bessent contradicted earlier reports, suggesting that the White House might await China's move before making any tariff adjustments. This uncertainty has contributed to a renewed demand for the JPY, traditionally viewed as a safe-haven currency.
Moreover, Japan’s Finance Minister, Katsunobu Kato, raised concerns about the negative impact of US tariffs on market stability. Japan’s Economic Revitalization Minister, Ryosei Akazawa, will visit the US on April 30 to discuss the tariffs further.
BoJ Governor Kazuo Ueda also mentioned the possibility of policy changes if the tariffs harm Japan's economic growth, highlighting the risks to the country’s economy.
Diverging Central Bank Policies Weigh on USD/JPY Pair
Therefore, the divergence between the Fed's dovish stance and the BoJ's more hawkish outlook has created a significant policy gap, further pressuring the USD/JPY pair.
Market expectations for the Fed to cut rates multiple times this year have weighed heavily on the US Dollar, limiting its ability to capitalize on recent recovery gains.
Traders are pricing in the possibility of a rate-cut cycle beginning as soon as June, with more cuts expected by year-end. This dovish outlook contrasts sharply with the BoJ’s stance, which remains focused on tightening policy to address inflation concerns.
Japan's inflation has remained persistently above the BoJ's 2% target, and traders are increasingly convinced that the BoJ will raise interest rates in 2025.
Moving ahead, traders turn their attention to the US economic calendar, upcoming data such as Weekly Initial Jobless Claims, Durable Goods Orders, and Existing Home Sales will be closely monitored for further clues on the Fed's future actions.
USD/JPY – Technical Analysis
USD/JPY continues to hold within a rising price channel after bouncing off the 141.57 support. Price is currently testing a confluence zone marked by the 50-period SMA (142.59) and previous resistance-turned-support at 142.58. A breakout above this level could open the door toward 144.29 in the near term.
The pair has also breached the descending trendline from the March high, indicating a shift in short-term momentum. RSI at 59.27 supports the bullish outlook, as it remains above the 50 threshold, suggesting buyers are still in control. However, traders should monitor for potential rejection around the channel top.
Should price drop below 141.57, the bullish structure would weaken, exposing 140.19 as the next support level.
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