During Asian trading, USD JPY remains in a corrective uptrend near 148.14 as the yen weakens, with most analysts expecting the Bank of Japan to keep its benchmark rate unchanged at 0.50% during Thursday’s policy meeting. Just a week ago, the odds of a rate hike were nearly 50%, but forecasts shifted after the announcement of a U.S.–Japan trade deal that reduces tariffs for Tokyo from 25% to 15%. BOJ officials view the agreement as removing a major source of uncertainty for the Japanese economy and enabling better monitoring of tariff effects via macro data.

As a result, the BOJ is widely expected to maintain its current policy stance at 0.50%, with only a single hike likely by year-end—should accelerating domestic inflation (driven by rising rice and auto prices) warrant it. According to Reuters, the central bank may set a new year-end CPI target at 2.0% (down from 2.2%), with a further drop to 1.7% projected for 2026.

Meanwhile, the U.S. dollar is still benefiting from last week’s positive momentum. The USDX holds firm at 97.30, rebounding from yearly lows after upbeat remarks from President Trump regarding trade policy. The latest EU–U.S. deal trims tariffs to 15% from a looming 30%. Durable goods orders for June fell 9.3%—much better than forecasts of –10.4%. Year-over-year, growth slowed to 0.2%, but still outpaced the 0.1% expectation, highlighting U.S. economic resilience and the likelihood of the Fed maintaining elevated rates.

Key Levels and Technical Outlook

USD/JPY trades within uptrend channelUSD/JPY trades within uptrend channel

On the daily chart, USD/JPY remains within an ascending channel (152.00–145.00), making another attempt at upper resistance. Technical indicators remain moderately bullish: fast EMAs on the Alligator indicator sit above the signal line, while the AO histogram is positive and building higher.

Support levels: 146.40, 142.60
Resistance levels: 148.80, 152.20

Trading Scenarios and Forecasts

  • Primary Scenario (Buy Stop):
    Entry: 148.80
    Take Profit: 152.20
    Stop Loss: 148.00
  • Alternative Scenario (Sell Stop):
    Entry: 146.40
    Take Profit: 142.60
    Stop Loss: 147.50
  • Key levels for both scenarios: 142.60, 146.40, 148.80, 152.20

Should the pair break and hold above 148.80, buying with a 152.20 target becomes attractive (stop: 148.00). Conversely, if USD/JPY falls below 146.40, shorts targeting 142.60 may be favored (stop: 147.50). Weekly timeframe recommended.