- USD/JPY bounced 0.6% on Friday as the Dollar strengthens.
- The pair gave a neat technical bounce from a key moving average.
- Markets are swinging broadly back toward hopes of Fed rate cuts.
USD/JPY rose on Friday, gaining six-tenths of a percent and breaking a two-day losing streak as the Dollar finds support in the broader market and strengthens the Dollar-Yen pair from a new touch of the exponential moving average ( EMA) of 50 days.
The US dollar gained ground broadly on Friday as the greenback is bolstered by falling US Treasury yields amid renewed bets of Federal Reserve (Fed) rate cuts in 2025. Key Segments of the Figures US inflation rates slowed slightly throughout the week, revitalizing hopes that price growth pressure will ease enough to push the Fed to make rate cuts sooner in the first half of the year. year than previously expected.
The Bank of Japan’s (BoJ) next rate decision is scheduled for early next Friday, where the normally very dovish Japanese central bank is expected to raise interest rates by another 25 basis points. Results from the US Purchasing Managers’ Index (PMI) activity survey are also expected next Friday, but leading up to the key events is a notably quiet data schedule, leaving investors to focus on the statements by those responsible for monetary policy.
USD/JPY Price Forecast
USD/JPY gave a neat technical bounce from the 50-day EMA on Friday, bouncing from 155.00 and setting up dollar bulls for a fresh rise on the charts after breaking a two-day losing streak. The immediate ceiling remains valued near the 159.00 level.
Even if the pair rotates towards a new bullish stance, there is still plenty of room to run before the Dollar-Yen pair reaches the all-time highs set in 2024 near 162.00. There is a strict limit on how high the dollar bulls can take the pair before the BoJ starts to get nervous again and has one hand on the intervention button.
USD/JPY Daily Chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the most traded currencies in the world. Its value is determined broadly by the performance of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of Japanese and US bonds or the risk sentiment among traders, among other factors.
One of the mandates of the Bank of Japan is currency control, so its movements are key for the Yen. The BoJ has intervened directly in currency markets on occasion, usually to lower the value of the Yen, although it often refrains from doing so due to the political concerns of its major trading partners. The BoJ’s current ultra-loose monetary policy, based on massive stimulus to the economy, has caused the depreciation of the Yen against its main currency pairs. This process has been exacerbated more recently by a growing policy divergence between the Bank of Japan and other major central banks, which have opted to sharply raise interest rates to combat decades-old levels of inflation.
The Bank of Japan’s ultra-loose monetary policy stance has led to increased policy divergence with other central banks, particularly the US Federal Reserve. This favors the widening of the spread between US and Japanese 10-year bonds, which favors the Dollar against the Yen.
The Japanese Yen is often considered a safe haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. In turbulent times, the Yen is likely to appreciate against other currencies that are considered riskier to invest in.
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.