USDJPY was up for the second successive session on Friday as traders continued to bet on the dollar following Wednesday’s Fed interest rate decision. The pair was up by 0.1% to trade at 148.97 at the time of writing, and stay on course to register its first successive weekly gain in 2025.
Nonetheless, the Japanese yen is still up by 5.33% against the dollar and the prevailing trade tariff war will likely limit gains by the greenback. However, the dollar’s short-term performance is likely to be propelled by the Fed’s decision to hold interest rates in the 4.25%-4.50% bracket.
In addition, the US labour market printed out strong figures on Wednesday, easing jitters over the economy’s trajectory. Initial Jobless Claims printed out at 223k for the week ending March 13, lower than analysts’ median forecast figure of 224k. That will provide support for the dollar, especially in the absence of high-impact data from Japan.
The Bank of Japan’s decision against a rate hike this week has also emboldened investors, and favours the USDJPY pair to stay up in the coming days. Furthermore, Fed Chairman Jerome Powell stated that they are in no rush to cut interest rates as the focus remains on taming the inflationary impacts of the ongoing trade tariff war.
The momentum on USDJPY calls for further upside above the pivot mark at 148.72. With the buyers in control, the pair will likely rise further and encounter the first resistance at 148.27. However, a stronger momentum will clear that barrier and potentially test the second resistance at 149.70.
Alternatively, a return below 148.72 will signal the onset of bearish control. In that case, USDJPY is likely to find the first support at 148.44. Breaking below that level will invalidate the upside narrative. In addition, that could strengthen the downward momentum to test the second support at 148.23.
This post was last modified on Mar 21, 2025, 13:02 GMT 13:02