US Dollar Forecast: USD/JPY Breaks Out on Upbeat US NFP Report
US Dollar Outlook: USD/JPY
USD/JPY breaks out of the range bound price action from earlier this week as the US Non-Farm Payrolls (NFP) report shows a 139K expansion in May versus forecasts for a 130K print, with Average Hourly Earnings unexpectedly holding steady at 3.9% during the same period.
US Dollar Forecast: USD/JPY Breaks Out on Upbeat US NFP Report
USD/JPY seems to be bouncing back ahead of the May low (142.12) as it rallies to a fresh weekly high (145.09), and the exchange rate may stage a further recovery as the upbeat NFP report encourages the Federal Reserve to keep US interest rates on hold.
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
Recent remarks from Fed officials suggest the central bank will stick to a wait-and-see approach as Governor Adriana Kugler judges that ‘we might be seeing some moderation in the growth of economic activity but not yet a significant slowdown,’ with the official going onto say that ‘we are already seeing the effects of higher tariffs, which I expect will continue to raise inflation over 2025’ while speaking at the Economic Club of New York.
In turn, US data prints may continue to sway USD/JPY ahead of the next Fed rate decision on June 18 as households and businesses adjust to the shift in fiscal policy, but swings in the carry trade may also influence the exchange rate especially as the Bank of Japan (BoJ) sticks to the sidelines.
With that said, USD/JPY may attempt to retrace the decline from the May high (148.65) as it defends the rebound from the weekly low (142.38), but the US Dollar may face headwinds as US President Donald Trump argues that if ‘the Fed would cut, we would greatly reduce interest rates, long and short, on debt that is coming due.’
USD/JPY Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/JPY on TradingView
- USD/JPY breaks out of the range bound price action from earlier this week to initiate a series of higher highs and lows, with a move/close above 145.90 (50% Fibonacci extension) bringing 147.10 (38.2% Fibonacci retracement) on the radar.
- Next area of interest comes in around the May high (148.65), with a break/close above 148.70 (38.2% Fibonacci retracement) opening up the 150.30 (61.8% Fibonacci extension) to 151.60 (61.8% Fibonacci retracement) zone.
- At the same time, lack of momentum to hold above the 144.40 (23.6% Fibonacci retracement) to 144.60 (50% Fibonacci extension) region may lead to a test of the weekly low (142.38), with a breach of the May low (142.12) raising the scope for a move toward the 140.50 (61.8% Fibonacci retracement) to 141.50 (38.2% Fibonacci extension) zone.
Additional Market Outlooks
Euro Forecast: EUR/USD Post-ECB Rally Eyes April High
Canadian Dollar Forecast: USD/CAD Drops as BoC Stays on Hold
GBP/USD Stuck in Narrow Range amid Failure to Test February 2022 High
US Dollar Forecast: USD/CHF Clears May Low
--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation.
StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67.6% 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. Please ensure you fully understand the risks involved by reading our full risk warning.
FOREX.com is a trading name of StoneX Europe Limited, and FOREX.com/ie is a domain operated by StoneX Europe Ltd, a member of StoneX Group Inc. StoneX Europe Ltd, is a Cyprus Investment Firm (CIF) company registered to the Department of Registrar of Companies and Official Receiver with a Registration Number HE409708, and authorized and regulated by the Cyprus Securities & Exchange Commission (CySEC) under license number 400/21. StoneX Europe is a Member of the Investor Compensation Fund (ICF) and has its registered address at Nikokreontos 2, 5th Floor, 1066 Nicosia, Cyprus.
FOREX.com is a trademark of StoneX Europe Ltd, a member of StoneX Group Inc.
This website uses cookies to provide you with the very best experience and to know you better. By visiting our website with your browser set to allow cookies, you consent to our use of cookies as described in our Privacy Policy.
Through passporting, StoneX Europe is allowed to provide its services and products on a cross-border basis to the following European Economic Area ("EEA") states: Austria, Bulgaria, Croatia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden.
StoneX Europe Ltd products, services and information are not intended for residents other than the ones stated above.
StoneX Europe Ltd may make third party material available on this website which may contain information included but not limited to the conditions of financial markets. The material is for information purposes only and does not contain, and should not be construed as containing, investment advice and/or investment recommendation and/or an investment research and/or an offer of or solicitation for any transactions in financial instruments; any decision to enter into a specific transaction shall be made by the client following an assessment by him/her of their situation. StoneX Europe Ltd makes no representation or warranty and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. We are not under any obligation to update any such material. Any opinion made may be personal to the author and may not reflect the opinion of StoneX Europe Ltd.
© FOREX.COM 2025