In an interview with Bloomberg, former Asian Development Bank President Masatsugu Asakawa highlighted the challenge of forecasting a clear outcome for the US-Japan trade talks, noting President Trump’s reluctance to compromise—especially regarding auto exports. Nonetheless, Asakawa suggested that Tokyo could resolve the dispute through increased investment in the US, revising auto safety standards to meet partner expectations, or contributing to US LNG infrastructure projects in Alaska.
US Dollar Strengthens as FOMC Signals Dovish Shift
The US dollar continues its recovery, with the USD Index (USDX) climbing to 97.50, drifting further from this year’s lows. Market sentiment was buoyed by the latest FOMC minutes, which revealed a majority of Fed members are open to rate cuts before year-end, with consensus building around two potential reductions. This dovish turn was reinforced by robust labor market data: Initial jobless claims fell for the fourth straight week, this time dropping from 232,000 to 227,000. The four-week moving average also declined, from 241,250 to 235,500, supporting a narrative of underlying US economic resilience.
Technical Analysis: USD/JPY Eyes Triangle Resistance
On the daily chart, USD/JPY is approaching resistance at the triangle pattern boundary (147.50–142.20), sustaining its broader bullish trend. Technical indicators remain mixed—Alligator’s fast EMAs stay above the signal line, though the Awesome Oscillator (AO) oscillates near neutral territory, posting intermittent bullish bars.
- Support levels: 145.40, 142.40
- Resistance levels: 147.80, 151.10
Trading Scenarios
Bullish setup: Open long positions on a breakout above 147.80, targeting 151.10. Place stop-loss at 146.50. (Timeframe: 7+ days)
Bearish setup: Open short positions on a confirmed move below 145.40, targeting 142.40. Place stop-loss at 145.70.
Top Forex Analyst Forecasts
“USD/JPY remains supported as US jobless claims signal labor market resilience and FOMC minutes shift expectations toward policy easing in late 2025. Should trade tensions escalate further, near-term volatility may favor safe-haven flows, but the pair’s technicals suggest a test of the 148.00–151.10 resistance band is likely before any sustained reversal.” — ForexLive Analysis Desk
“The yen remains vulnerable to policy divergence as the Bank of Japan hesitates on rate hikes. Expect consolidation between 145.40 and 147.80, with a bullish breakout targeting 151.10 if US macro data remain supportive.” — DailyFX Senior Strategist