USD/JPY Forecast: Buyers aim to challenge the December high at 158.07
02.01.2025, 18:04

USD/JPY Forecast: Buyers aim to challenge the December high at 158.07

  • Tepid Chinese data weighed on the market’s mood at the beginning of the day.
  • Expectations for higher US Treasury yields undermine demand for the JPY.
  • USD/JPY trades near the multi-month high posted in December and aims to break higher.

The USD/JPY pair traded as high as 157.84 on Thursday, holding not far from the December multi-month high of 158.07 by the end of the day. Market participants kept the focus on US political uncertainty as former President Donald Trump gears up to retake office while geopolitical tensions in the Middle East continue.

The Japanese yen suffered from mounting speculation that the upcoming Trump presidency will keep inflationary pressures up, resulting in the Federal Reserve keeping interest rates higher for longer. In its December statement, the US Central Bank has already hinted at just two potential rate cuts this year, halving the four cuts foreseen three months previously. Expectations of higher Treasury yields maintained the Greenback on the winning side.

Tepid Chinese data released at the beginning of the day spurred the sour mood. The country’s December Caixin Manufacturing PMI was confirmed at 50.5, down from the previous 51.7 and missing the 51.7 expected by market players.

USD/JPY Technical Outlook

USD/JPY posted a higher high and a higher low on a daily basis, supporting a bullish continuation, particularly if the pair overcomes the December high of 157.92 (December 20). Gains beyond the latter expose the weekly top of 158.85 (July 16). Further up, the 2024 peak of 161.95 (July 3) comes before the round level of 162.00.  The initial support lies at the aforementioned intraday low, followed by the key 200-day SMA at 152.29, which precedes the December low of 148.63 (December 3) and the weekly low of 141.64 (September 30). If this level is breached, the market may fall to the 2024 bottom of 139.57 (September 16).  In the 4-hour chart, the RSI aims north at around 56, indicating additional gains are likely in the near term.

Japanese Yen PRICE Today

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the British Pound.

  USD EUR GBP JPY CAD AUD NZD CHF
USD   0.90% 1.19% 0.14% 0.14% -0.18% 0.06% 0.67%
EUR -0.90%   0.22% -0.68% -0.77% -1.03% -0.87% -0.22%
GBP -1.19% -0.22%   -0.94% -1.03% -1.35% -1.11% -0.55%
JPY -0.14% 0.68% 0.94%   -0.08% -0.40% -0.22% 0.39%
CAD -0.14% 0.77% 1.03% 0.08%   -0.32% -0.12% 0.51%
AUD 0.18% 1.03% 1.35% 0.40% 0.32%   0.16% 0.63%
NZD -0.06% 0.87% 1.11% 0.22% 0.12% -0.16%   0.68%
CHF -0.67% 0.22% 0.55% -0.39% -0.51% -0.63% -0.68%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

 

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