CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
☰
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Open account
✖
News hero gradient

USD/JPY Outlook: Bullish Momentum Builds Ahead of CPI and FOMC Commentary

By :   Matt Simpson , Market Analyst
July 14, 2025 10:31 PM

The US dollar continues to strengthen against the Japanese yen, with USD/JPY now flirting with the upper boundary of a key technical pattern. With the June US CPI report due today and a barrage of FOMC speakers this week, traders are watching closely for clues on whether inflation is genuinely sticky—or simply transitory noise from base effects and tariff fears. Positioning data and chart patterns are beginning to favour further upside for USD/JPY, though volatility is likely as markets digest the data and political reaction.

View related analysis:

 

Bullish USD/JPY Momentum Builds as CPI and Fed Outlook Take Centre Stage

We have a slew of FOMC speakers lined up this week, and today’s US CPI report could shape the tone of their messaging. Jerome Powell recently outlined his expectation that Trump’s proposed tariffs would begin feeding into inflation during the summer months, making June’s CPI figures especially important. But we also have the ‘basing effect’ to factor in, which has seen forecasts for CPI to rise to 3% y/y (or 0.3% m/m) and CPI rise to 2.6% y/y or (0.3% m/m). 

Traders then need to decipher whether any uptick in inflation is due to the basing effect or Trump’s tariffs and whether it is ‘transitory’. In either case I have a hard time believing today’s CPI release will allow the Fed to cut at their next meeting, so it really comes down to shift the odds for a September cut. 

Fed Fund futures currently imply a 59.3% chance of a September cut. And expectations for higher CPI may have set the stage for even a modest uptick in inflation being interpreting it as ‘transitory’. So unless CPI prints well above expectations, traders could argue that inflation isn’t as concerning as Powell implies.

Naturally, any signs of soft inflation data could prompt Trump to weigh in, likely criticising the Fed — and Powell directly — for not already cutting rates by 100 basis points. Expect some political fireworks if the data underwhelms.

 
Chart prepared by Matt Simpson, data source: Bureau of Labor Statistics (LBS), London Stock Exchange Group (LSEG)

 

 

COT Data Signals Bullish Shift for USD/JPY as Yen Positioning Softens

Last week I outlined a technically bearish scenario for USD/JPY based around a potential symmetrical triangle pointing towards and eventual downside breakout on the weekly chart. Yet bearish momentum is clearly lacking and USD/JPY has risen over 1% since Thursday. This means prices for USD/JPY are at the extreme upper limits for the triangle, and therefore on the verge of being scrapped. 

I also noted in yesterday’s COT report that net-short exposure to the US dollar index could be at a sentiment extreme for bears and that net-long exposure for yen futures might continue lower, given the reduction in short bets against the Japanese yen in recent weeks alongside a rise of longs. And that is bullish for USD/JPY should that trend continue. 

Chart prepared by Matt Simpson, data source: CME, London Stock Exchange Group (LSEG)

 

USD/JPY Technical Analysis: US Dollar vs Japanese Yen

The weekly chart (left) shows USD/JPY trading around the upper trendline of the aforementioned symmetrical triangle. A softer-than-expected CPI print could trigger a short-term pullback in USD/JPY, though any retracement may be limited given the strong bullish momentum that has driven the US dollar higher against the Japanese yen.

It appears that USD/JPY is intent on testing the December low near 148.65 or the key 149.00 handle. A decisive break above either level would likely shift focus to the psychological 150.00 barrier.

That said, the 200-day EMA at 147.91 sits just below and could offer initial support or resistance in the near term. Still, a break above 148.00 would bring the December low within reach. With the daily RSI (14) trending higher and not yet overbought—confirming rising prices—a bullish breakout remains the more probable scenario, especially in a backdrop of a weak Japanese yen and resilient US dollar.

Chart analysis by Matt Simpson - data source: TradingView USD/JPY

 

Economic Events in Focus (AEST / GMT+10)

09:01 GBP BRC Retail Sales Monitor (YoY) (Jun) (GBP/USD, FTSE 100)
10:30 AUD Westpac Consumer Sentiment (Jul) (AUD/USD, ASX 200)
11:30 CNY House Prices (YoY) (Jun) (USD/CNH, Hang Seng Index, CSI 300)
12:00 CNY Fixed Asset Investment, GDP, Industrial Production, Retail Sales, Unemployment (Jun), NBS Press Conference (USD/CNH, Hang Seng Index, CSI 300)
17:00 EUR Core CPI (YoY), Spanish CPI (MoM & YoY), Spanish HICP (MoM & YoY) (Jun) (EUR/USD, DAX)
19:00 EUR German ZEW Current Conditions, German ZEW Economic Sentiment, Industrial Production (May), ZEW Economic Sentiment (Jul) (EUR/USD, DAX)
19:30 EUR German 2-Year Schatz Auction (EUR/USD, German Bonds)
20:00 EUR ECOFIN Meetings, Reserve Assets Total (Jun) (EUR/USD, DAX)
21:00 USD OPEC Monthly Report (Crude Oil, USD)
22:15 CAD Housing Starts (Jun) (USD/CAD, TSX)
22:30 USD Core CPI Real Earnings (Jun), NY Empire State Manufacturing Index (Jul) (USD, S&P 500, Nasdaq 100, Dow Jones, Gold, Crude Oil)
22:30 Core Manufacturing Sales (May), (USD/CAD, CAD/JPY, EUR/CAD, AUD/CAD, TSX)
22:55 USD Redbook (YoY) (USD, S&P 500)
23:15 USD FOMC Member Bowman Speaks (USD, US indices)
01:00 NZD GlobalDairyTrade Price Index (NZD/USD, NZX 50)
02:45 USD Fed Vice Chair for Supervision Barr Speaks (USD, US indices)
03:00 USD FOMC Member Barkin Speaks (USD, US indices)
04:45 USD Fed Collins Speaks (USD, US indices)

 


View the full economic calendar

 

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

 

How to trade with City Index

You can trade with City Index by following these four easy steps:

  1. Open an account, or log in if you’re already a customer 

    • Open an account in the UK
    • Open an account in Australia
    • Open an account in Singapore
     

  2. Search for the market you want to trade in our award-winning platform 
  3. Choose your position and size, and your stop and limit levels 
  4. Place the trade

 

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.

Delayed London Stock Exchange (LSE) Data

The London Stock Exchange (LSE) market data displayed or referenced on this website is provided on a delayed basis and is not in real time. The delay period may vary but is typically at least 15 minutes. This data is intended for information purposes only and should not be relied upon for trading, investment, or other financial decisions. We do not guarantee the completeness, reliability, or suitability of the data for any particular purpose. Users should consult real-time data sources and obtain professional advice before making any financial decisions.

© City Index 2026