USD/JPY Pulls Back Ahead of Monthly High with US PCE in Focus
US Dollar Outlook: USD/JPY
USD/JPY no longer carves a series of higher highs and lows as it pulls back ahead of the monthly high (151.31), and the exchange rate may track the negative slope in the 50-Day SMA (151.54) as it still holds below the moving average.
USD/JPY Pulls Back Ahead of Monthly High with US PCE in Focus
USD/JPY may struggle to retain the advance from the monthly low (146.54) as Bank of Japan Governor Kazuo Ueda reiterates that ‘if the outlook for economic activity and prices presented in the January Outlook Report is realized, the Bank will accordingly continue to raise the policy interest rate,’ and the diverging paths between the BoJ and Federal Reserve may continue to influence the exchange rate as Chairman Jerome Powell and Co. pursue a less restrictive policy.
Join David Song for the Weekly Fundamental Market Outlook webinar.
David provides a market overview and takes questions in real-time. Register Here
In turn, swings in the carry trade may sway USD/JPY as Fed officials still forecast lower interest rates for 2025, but the exchange rate may extend the advance from the start of the week as the update to the US Personal Consumption Expenditure (PCE) Price Index is anticipated to show sticky inflation.
US Economic Calendar
The core PCE, the Fed’s preferred gauge for inflation, is expected to increase to 2.7% in February from 2.6% per annum the month prior, and signs of persistent price growth may keep USD/JPY afloat as it encourages the Federal Open Market Committee (FOMC) to retain the current policy.
However, a softer-than-expected PCE print may push the FOMC to further unwind its restrictive policy, and speculation for a looming Fed rate-cut may drag on the Greenback as the central bank projects that ‘the appropriate level of the federal funds rate will be 3.9 percent at the end of this year.’
With that said, USD/JPY may track the negative slope in the 50-Day SMA (151.54) as it pulls back ahead of the monthly high (151.31), but the exchange rate may attempt to retrace the decline from the February high (155.89) should it defend the advance from the start of the week.
USD/JPY Price Chart – Daily
Chart Prepared by David Song, Senior Strategist; USD/JPY on TradingView
- USD/JPY holds below the monthly high (151.31) as it struggles to extend the recent series of higher highs and lows, and a move below the 148.70 (38.2% Fibonacci retracement) to 150.30 (61.8% Fibonacci extension) zone may push the exchange rate back towards the monthly low (146.54).
- A break/close below the 144.60 (50% Fibonacci retracement) to 145.90 (50% Fibonacci extension) region opens up the October low (142.97), but a breach above the monthly high (151.31) may push USD/JPY towards 151.95 (2022 high).
- A break/close above 153.80 (23.6% Fibonacci retracement) brings the February high (155.89) on the radar, with the next area of interest coming in around 156.50 (78.6% Fibonacci extension).
Additional Market Outlooks
British Pound Forecast: GBP/USD Coils with UK CPI on Tap
AUD/USD Halts Four-Day Selloff Ahead of Australia CPI
Canadian Dollar Forecast: USD/CAD Breakout Looms on Trump Tariffs
EUR/USD Post-Fed Weakness Pulls RSI Back from Overbought Zone
--- 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