USD/JPY Price Analysis – March 13, 2025
Daily Price Outlook
During the European trading session, the USD/JPY currency pair remained under pressure, falling to around 147.58 on Thursday. The Japanese Yen (JPY) strengthened against the US Dollar (USD) as concerns over trade tariffs and growing expectations of further interest rate hikes by the Bank of Japan (BoJ) bolstered demand for the safe-haven currency.
Meanwhile, the USD remained weak amid rising speculation that the Federal Reserve (Fed) will cut interest rates this year, adding further downside pressure on the pair.
USD/JPY Pressured by BoJ Rate Hike Expectations and Trade Concerns
The Japanese Yen found strong support as market participants anticipated that the BoJ would continue raising interest rates to curb inflation. With Japanese firms agreeing to wage hikes for the third consecutive year, consumer spending is expected to rise, further fueling inflation.
This scenario increases the likelihood of additional rate hikes by the BoJ, pushing the yield on Japan’s 10-year government bond near its highest level since the 2008 financial crisis. Additionally, BoJ Governor Kazuo Ueda signaled that long-term interest rates would be left to market forces, reinforcing expectations of higher yields.
On the trade front, US President Donald Trump’s decision to impose a 25% tariff on all steel and aluminum imports heightened global trade tensions. His warning of reciprocal tariffs on other countries increased uncertainty, leading investors to seek refuge in the safe-haven Japanese Yen.
Market concerns over potential retaliatory measures from the European Union and Canada further weighed on sentiment, benefiting the JPY.
US Dollar Weakens Amid Fed Rate Cut Speculation
The US Dollar remained subdued near a multi-month low, struggling against the backdrop of growing expectations for Fed rate cuts.
Traders increased their bets on multiple rate cuts this year, especially after weaker-than-expected US inflation data. On the data front, the latest Consumer Price Index (CPI) report showed that headline inflation slowed to 2.8% year-over-year in February from 3% in the previous month.
Core CPI, which excludes food and energy prices, also eased to 3.1% from 3.3%, missing market expectations of 3.2%.
This softer inflation data reinforced market speculation that the Fed may need to ease monetary policy to prevent an economic slowdown.
The outlook for lower interest rates reduced the USD’s appeal, contributing to the ongoing weakness of the USD/JPY pair. Investors now turn their focus to the upcoming US Producer Price Index (PPI) data for further clues on the Fed’s policy direction.
USD/JPY – Technical Analysis
USD/JPY is holding steady at 147.609, up slightly as the market weighs broader risk sentiment and central bank expectations.
The pair remains under pressure below its pivot point at 148.390, signaling a potential downside move if sellers gain control. The 50-day EMA at 147.667 is acting as a dynamic resistance level, keeping further upside limited for now.
If USD/JPY breaks below immediate support at 147.285, the next downside targets are 146.547 and 145.969, where buyers may attempt to regain control.
However, a move back above 148.390 could shift momentum in favor of the bulls, with resistance at 149.124 and 149.600 standing as key hurdles before the psychologically significant 150.167 level.
For now, USD/JPY remains bearish below 147.925, with traders targeting key support levels. A sustained move below 147.285 could accelerate losses, while a break above 148.390 would indicate a potential shift in sentiment toward further upside.
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