Fundamental Analysis

• This week features U.S. tech company earnings and U.S. employment statistics.
• USDJPY is on a recovery trend; the key is whether it can touch 145JPY.
• The Bank of Japan (BoJ) is likely to hold off on a rate hike, as economic and inflation forecasts may be downgraded.

USDJPY Technical Analysis

Analyzing the daily chart of USDJPY. USDJPY temporarily entered the 144JPY range. This move is likely driven by reports that the BoJ will likely forego a rate hike at its upcoming policy meeting. The absence of any U.S. request for a weaker USD at the recent U.S.-Japan finance meeting also played a role.

Concerns have been raised that Trump’s tariffs could lead to a downturn in the economy and inflation, which could force the BoJ to halt its rate hike cycle. There are even market fears that if economic indicators worsen, the cycle could shift back to rate cuts.

The immediate target is 145JPY. 145JPY has historically been a heavily watched price level and is expected to serve as strong resistance. It will be crucial to monitor whether the current downtrend continues.

Day trading strategy (1 hour)

Analyzing the 1-hour chart of USDJPY. Japan will enter Golden Week from this week through next, meaning the markets may become thin. Therefore, caution is needed regarding potential high volatility. Markets tend to move more than expected during long holidays, so careful position management is essential.

Although USDJPY temporarily reached 144JPY, it faced strong resistance. Every approach toward 144JPY has seen the formation of large upper wicks, indicating strong selling pressure. However, with the BoJ likely to hold off on a rate hike, selling pressure may not persist for long.

In the short term, buying entries are worth considering. The image is to buy in the high 142JPY range and exit just below 144JPY.

Support/Resistance lines

Key support and resistance lines to consider:

• 145JPY: A historically significant price level.

Market Sentiment

USDJPY Sell: 44% / Buy: 56%

Today’s important economic indicators

*Trading advice in this article is not provided by Milton Markets, but by Shu Fujiyasu Jr., a certified technical analyst.