- Summary:
- The USDJPY is bound to stay on the downtrend as traders view the dollar as a high-risk currency amid talk of a looming US recession.
The US dollar slid further against the Japanese yen on Friday as global trade tariff wars escalated. The USDJPY was down by 0.48% and on track to register four successive daily losses for the first time since August 2024. Also, the pair had hit six-month lows of 144.54 at the time of writing underlining a string bearish hold.
US President added fuel to trade tariff wars by broadening the list of countries targeted by its reciprocal tariffs and raising trade barriers against some of its biggest trading partners, including the EU, China, India and Japan. Furthermore, Trump’s measures roped in some of the world’s least-developed countries, leaving virtually no one unscathed.
China has retaliated against the 54% tariff rate imposed by the US following an additional 34%announeced by Trump on Wednesday. The world’s second-largest economy has imposed a 34% tariff on imports of all US products starting April 10. In addition, China added 11 US companies in its list of “unreliable entities”, effectively barring them from doing business in the country.
The USDJPY is likely to stay on the downtrend as traders increasingly view the dollar as a high-risk currency amid talk of a looming US recession. The DXY Index which weighs the US dollar against six of the most commonly traded currencies was near six-month lows at the time of writing, affirming the bearishness. That said, the Japanese yen is among the most affected by Trump’s tariff plans that have targeted the auto industry.
USDJPY Forecast
USDJPY pivots at 146.00 and resistance at that level favours the sellers to stay in control. The trading pair will likely find its initial support at 145.00. However, a stronger downward momentum will break below that mark and find the next support at 144.00.
Conversely, moving above 146.00 will shift the momentum to the upside, with the first barrier likely to be at 146.74. The downside narrative will be invalid if the price breaches that level, and the resulting momentum could potentially send the price higher to test 147.57.
