USD/JPY Forecast: Japan’s Upbeat GDP Fuels BoJ Hike Bets…

• The USD/JPY forecast reveals rising bets for an additional Financial institution of Japan charge hike.

• Japan’s GDP elevated by 2.eight% within the fourth quarter of 2024.

• Current BoJ policymaker remarks have proven a extra hawkish tone.

The USD/JPY forecast reveals rising bets for an additional Financial institution of Japan charge hike in July after Japan launched an upbeat GDP report. In consequence, Japanese bond yields have rallied to new highs, boosting the yen.

Information on Monday revealed that Japan’s GDP elevated by 2.eight% within the fourth quarter of 2024. This determine was a lot greater than the forecast of 1.zero%, exhibiting stronger-than-expected financial enlargement. Furthermore, this report adopted a number of others exhibiting stronger consumption, wage progress, and inflation within the nation. Consequently, the stage is ready for extra Financial institution of Japan charge hikes. 

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Japan’s central financial institution hiked charges in January and left the door open for extra hikes. Market contributors have been pricing at the least yet one more hike within the fourth quarter. Nonetheless, current policymaker remarks have proven a extra hawkish tone and a willingness to hike charges additional. Moreover, information has pushed analysts to forecast one other charge hike as early as April. In the meantime, markets are pricing an 80% probability of a hike in July.

In the meantime, the greenback eased initially of a quiet week, with few main reviews from the US. Market contributors will give attention to Trump’s speech on Tuesday, which could give extra clues on tariffs. The delay in reciprocal tariffs weighed on the dollar final week. 

USD/JPY key occasions right now

Market contributors aren’t anticipating key reviews from Japan or the US. 

USD/JPY technical forecast: Bears attacking 151.02 help

On the technical aspect, the USD/JPY value has collapsed after failing to interrupt above its resistance trendline. It at present trades under the 30-SMA with the RSI close to the oversold area, suggesting a bearish bias. Nonetheless, bears are approaching a stable hurdle on the 151.02 help stage which may pause the decline. 

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USD/JPY has maintained a downtrend, making decrease highs and lows with a transparent resistance trendline. Nonetheless, the development has been shallow, with the value chopping by the 30-SMA. If this development continues, the value will quickly break under the 151.02 help stage to make a decrease low. 

However, the value would possibly pause at 151.02 and reverse to retest the resistance trendline. A break above the trendline would verify a bullish reversal.

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