The Japanese Yen seeks a new impulse in the BOJ; The bullish potential seems intact

• The Japanese Yen operators refrain from aggressive bets before the Boj’s policy decision.
• Updated economic projections will be examined in search of clues on the future path of feat cuts.
• Divergent policy expectations between the BOJ and the Fed should continue to support the Low Performance JPY.

The Japanese Yen (JPY) breaks a two -day loss streak in front of his US counterpart, since the operators choose to stay out and wait for the crucial policy decision of the Bank of Japan (BOJ) this Thursday. In addition, the updated economic projections and the comments of the governor of the Boj, Kazuo Ueda, at the press conference after the meeting will be examined in search of clues about the possible moment of the next increase in interest rates. This, in turn, will play a key role in determining the next JPY directional movement.

Looking ahead to the key risk event of the Central Bank, the hopes of a possible de -escalation of the commercial war between the US and China continue to support a positive risk tone and act as a wind against for the jpy of safe refuge. However, the resurgence of the fears of recession in the US maintains a limit on optimism. In addition, bets for more rates cuts by the Federal Reserve (FED), which mark great divergence compared to the aggressive expectations of the BOJ, should contribute to the relative superior performance of the low -performance JPY against the US dollar (USD).

The Japanese Yen operators await the crucial policy decision of the BOJ and the economic projections updated before carrying out directional bets

• The Bank of Japan is expected to announce its policy decision this Thursday and will be widely anticipated that it will maintain the policy interest rate at 0.5% amid the uncertainty around US tariffs Meanwhile, media reports suggest that the Central Bank could review its GDP forecasts for fiscal years 2025 and 2026 to less than 1%.
• Investors will also keep an attentive eye to updated inflation projections and when the BOJ expects to reach their price objective. The governor of the Boj, Kazuo Ueda, has spoken repeatedly about the dual risks for inflation. Therefore, Ueda’s comments will be key to evaluating the future path of rates increases, which, in turn, will boost Japanese yen.
• The final manufacturing PMI of Au Jibun Bank Japan stood at 48.7 in April 2025, above a preliminary reading of 48.5 and the minimum of 12 months of March 48.4. However, this still marks the tenth consecutive month of decline in the manufacturing activity, although little does to provide a significant impulse before the key risk event of the Central Bank.
• From the US, Automatic Data Processing (ADP) on Wednesday reported that employment in the private sector increased by 62,000 in April. This represented a notable decrease with respect to the increase of 147,000 (reviewed since 155,000) registered in March and was also well below the market expectation of a 108,000 reading.
• According to the advanced estimates of the Office of Economic Analysis, the US economy contracted an annualized rate of 0.3% during the first quarter of 2025, after growing at a solid pace of 2.4% in the anterior quarter. The data revives fears about an imminent recession in the USA in the midst of relief signals in inflationary pressures.
• The US Personal Consumption Expenditure Index (PCE) fell to 2.3% in annual terms in March from 2.5% in February. In addition, the underlying PCE price index, which excludes volatile food and energy prices, rose 2.6% compared to the 3% increase reported in February and was in line with analysts’ estimates.
• This adds to the concerns about the erratic commercial policies of the president of the US, Donald Trump, and reaffirms the bets that the Federal Reserve will resume its cycle of feat cuts in June. In fact, Trump said Thursday that we have “potential” trade agreements with India, South Korea and Japan, and that there is a “very good probability that we reach an agreement with China.”
• Meanwhile, operators are valuing the possibility that the US Central Bank reduces indebtedness costs at a complete percentage point for the end of the year. This keeps the US dollar well within the reach of a minimum of several years achieved last week and suggests that the lowest resistance path for low -performance JPY remains upwards.

The USD/JPY could face strong resistance near the 143,55-143.60 area; Technical configuration justifies some caution for bullies

From a technical perspective, the USD/JPY torque seeks to consolidate its strength beyond the level of 143.00 and the simple mobile average (SMA) of 100 periods in the 4 -hour graph. However, any subsequent movement will probably face a strong resistance near the region of 143.55-143.60 before the round figure of 144.00, in the middle of still negative oscillators in the daily chart. That said, some continuation purchases will establish the scenario for an extension of the recent recovery from a minimum of several months and will raise cash prices to the next relevant obstacle near the region of 144.60-144.65. The ascending trajectory could extend even more and allow the bullies to recover the psychological level of 145.00.

On the other hand, the 142.65-142.60 area now seems to protect the immediate fall, below which the USD/JPY torque could fall to the level of 142.00. A convincing rupture below the latter will be seen as a new trigger for the bearish operators and will make cash prices vulnerable to accelerating the fall to the middle zone of 141.00, on a route to the region of 141.10-141.00. The descending trajectory could extend even more towards the intermediate support near the 140.50 zone and eventually expose the minimum of several months, levels below the psychological level of 140.00 reached last week.