Trade Analysis & Reviews: 02.06.2025 - USD/JPY. Analysis and...

02.06.2025 06:42 PM

USD/JPY. Analysis and Forecast

Currently, the Japanese yen continues to demonstrate strength against the U.S. dollar, pushing the USD/JPY pair below the key 143.00 level. Expectations that the Bank of Japan will raise interest rates again this year make the yen more attractive to investors. Geopolitical tensions and uncertainty surrounding President Donald Trump's trade policies further increase demand for safe-haven assets such as the yen. Meanwhile, rate cuts by the Federal Reserve are creating a divergence in monetary policy between the two countries, contributing to the ongoing strengthening of the Japanese yen.

From a technical standpoint, last week's drop below the 200-period Simple Moving Average (SMA) on the 4-hour chart favors the USD/JPY bears. Along with negative oscillators across all timeframes, this indicates that the path of least resistance for spot prices remains downward, supporting the prospects for further losses. Therefore, continued weakness below the 143.00 level, toward the next significant support around 142.40, looks likely. Eventually, the pair could drop to the 142.10 level, or the monthly low.

On the other hand, the 200-period SMA on the 4-hour chart near the 144.00 psychological level acts as a hurdle. Beyond that lies the 144.25–144.50 supply zone, above which the USD/JPY pair may attempt to reclaim the 145.00 psychological level. Sustained strength above this area would open the path for further gains.

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*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

Fundamental analysis