USD/JPY Holds Near 147.40 as Japan Cuts Growth Forecast to Just 0.7%
USD is back up against the yen, trading near 147.40 after hitting session lows of 146.70. This bounce comes even as Japan’s government...
Quick overview
- USD is trading near 147.40 against the yen after a low of 146.70, despite Japan downgrading its 2025 GDP forecast.
- Private economists are urging the Bank of Japan to consider rate hikes as inflation exceeds 2%, indicating a shift in policy focus.
- Technically, USD/JPY shows support at 147.36, with a bullish outlook if it breaks above 148.33, while failure to do so may lead to a drop.
- Traders are advised to enter long positions above 148.33 with a stop-loss below 147.70, targeting 148.81 and 149.31.
USD is back up against the yen, trading near 147.40 after hitting session lows of 146.70. This bounce comes even as Japan’s government downgraded 2025 GDP to 0.7% from 1.2% in January. The revision is due to Trump tariffs and global demand. But the yen barely budged, so it’s not surprised.
BoJ Under Pressure
Private economists on Japan’s top economic council are calling for the BoJ to act faster. With inflation above 2%, one adviser said rate hikes may be overdue. Another said policy should now focus on stabilizing inflation, not spurring it. This is getting more and more worried about living cost pressure, so the BoJ may tighten but the yen is not moving so maybe the market already expects this.
USD/JPY Technical Outlook & Trade Setup
Technically, USD/JPY is finding support at 147.36 50 period SMA and the ascending trendline from July 23 low. We have higher lows, a bullish sign. But the descending trendline from 150.89 high caps the upside. The pair bounced from 146.72 Fibonacci low and now near 147.87 23.6% retracement.
Here’s the setup in simple terms:
- Bullish case: Break and close above 148.33 the mid-range ceiling could take the pair to 148.81 (50% Fib) and 149.31 (61.8% Fib)
- Bearish case: Failure to clear 148.33 could drag the pair back to 147.36 SMA or 146.72 base and stay range bound
Trade Setup:
Enter long if price close above 148.33 with volume, set stop-loss below 147.70. Targets: 148.81, then 149.31. But be patient, stick to the structure and wait for a confirmed breakout to avoid getting trapped.
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