The dominant factor shaping market expectations for the coming weeks remains the escalation of the U.S.–Iran conflict. On March 6, U.S. President Donald Trump demanded the unconditional surrender of the Islamic Republic, refusing to enter negotiations. The destruction of processing facilities near Tehran continues, while Iranian drones are reportedly targeting civilian and military infrastructure across the region, including Dubai International Airport and energy facilities in Saudi Arabia. The Strait of Hormuz, through which about 20% of global hydrocarbon supplies pass, has been officially blocked. As a result, the price of Brent crude oil has exceeded $82 per barrel. For Japan, which imports nearly 100% of its fuel needs, this means a sharp deterioration in trade conditions, rising external payments, and significant structural pressure on the yen.
Given these developments, national oil refining companies have appealed to the government to allow the use of crude from the country’s strategic reserves. According to the Ministry of Trade, at the end of last year these reserves were sufficient for 254 days, including 146 days of state reserves and 101 days of private stockpiles.
Under these conditions, the next steps of the Bank of Japan remain uncertain. Deputy Governor Ryozo Himino stated that the regulator’s baseline monetary policy approach has not changed but declined to confirm readiness for tightening in April. Meanwhile, Japan’s Minister of Economy, Trade and Industry Ryosei Akazawa has traveled to the United States to negotiate the second package of Japanese investment and loan projects in the American economy totaling $550B (about 86T yen). The initiative is a key element of the bilateral tariff agreement. The minister plans to meet with U.S. Commerce Secretary Howard Lutnick to discuss projects including the construction of a next-generation nuclear reactor, a copper smelter, and other strategic initiatives. His visit will take place ahead of the meeting between Prime Minister Sanae Takaichi and President Trump. In February, the first package of three projects worth $36B was already announced, including a gas power plant, a deepwater oil export terminal, and the production of synthetic diamonds.
It is also worth noting that in February the U.S. Supreme Court declared the tariffs introduced by the Republican administration invalid. In response, the government imposed a unified 10% tariff on all countries, while Treasury Secretary Scott Bessent warned that it could be increased to 15% within a week. Previously, reciprocal tariffs were set at 25%, but special rules applied: if the base rate was below 15%, the tariff was raised to 15%, and if it was 15% or higher, the existing rate remained unchanged.
On Wednesday at 14:30 (GMT+2), investors will focus on the release of the U.S. Consumer Price Index (CPI). On Friday at the same time, attention will shift to the revised U.S. GDP data and the PCE price index, which is expected to reach 0.3% month-over-month. If the data confirms persistent inflation amid the energy shock, expectations for Federal Reserve policy easing could decline further, supporting the dollar and allowing the pair to test the 159.00 level.
Support and resistance levels
On the daily chart, Bollinger Bands are trending upward while the price range expands, opening the way for bulls toward new highs. The MACD maintains a strong buy signal (the histogram remains above the signal line). Meanwhile, the Stochastic oscillator has risen sharply after a prolonged flat period near the 80 mark and is currently near 100, signaling significant risks of short-term overbought conditions.
Resistance levels: 159.00, 159.45, 160.00, 161.00.
Support levels: 158.50, 158.08, 157.50, 157.00.
Trading scenarios and USD/JPY forecast
Long positions can be opened after a breakout above 159.00 with a target at 160.00. Stop-loss — 158.50. Implementation period: 1–2 days.
Short positions can be opened after a rebound from 159.00 followed by a breakdown below 158.50 with a target at 157.50. Stop-loss — 159.00.
