USD/JPY Forecast and News
USD/JPY reacts little to Japan's Household Spending data as focus remains on US NFP
USD/JPY is trading with a positive bias for the fourth consecutive day, hovering near the top end of its weekly range, at around 157.00. Meanwhile, an unexpected rise in Japan's Household Spending keeps the door open for further policy tightening by the BoJ. This marks a significant divergence compared to dovish Fed expectations, which acts as a headwind for the US Dollar and might cap the currency pair ahead of the crucial US NFP report, due later today.
Latest Japanese Yen News
USD/JPY Technical Overview
The Japanese Yen (JPY) trims earlier gains against the US Dollar (USD) on Thursday, as the Greenback strengthens broadly following the latest US economic releases. At the time of writing, USD/JPY trades around the 157.00 mark, pushing higher for a third consecutive day.
Fundamental Overview
Data released by the US Department of Labor showed Initial Jobless Claims rose modestly to 208,000 in the week ended January 3, slightly below market expectations of 210,000 and up from the previous week’s revised reading of 200,000.
Continuing Jobless Claims rose to 1.914 million from 1.858 million, while the four-week moving average of Initial Jobless Claims fell to 211,750 from 219,000, reinforcing signs of a still-resilient US labour market.
The US Dollar also drew support from a sharp improvement in the US trade balance. Data released by the Bureau of Economic Analysis and the US Census Bureau showed the Goods and Services Trade deficit narrowed to $29.4 billion in October, well below market expectations of $58.9 billion and sharply improved from the previous month’s revised shortfall of $48.1 billion.
The reading marked the smallest deficit since June 2009, as imports fell to a 21-month low and exports rose to a record high amid tariff-driven volatility.
The US Dollar Index (DXY), which tracks the Greenback against a basket of six major currencies, trades around 98.80, holding close to one-month highs alongside rising US Treasury yields.
Taken together, the latest US data have helped ease concerns about a slowdown in the labour market, supporting the view that the Federal Reserve (Fed) can afford to remain patient. The CME FedWatch Tool shows markets assigning around an 88% probability that interest rates will be left unchanged at the January 27-28 meeting.
Still, investors continue to price in two rate cuts later this year, with Friday’s Nonfarm Payrolls (NFP) report likely to guide near-term expectations.
In Japan, the Yen is also facing modest pressure from escalating tensions with China. Beijing has recently imposed restrictions on exports of so-called “dual-use” items to Japan, citing national security concerns, and has also launched an anti-dumping investigation into dichlorosilane imports from Japan, a chemical used in semiconductor production.
On the data front, Japan’s labour cash earnings growth remained soft in November, rising just 0.5% YoY, well below market expectations of 2.3% and easing sharply from 2.6%.
Latest JPY Analysis
Editors' picks
AUD/USD flat lines around 0.6700, awaits China's inflation data
AUD/USD consolidates around 0.6700 in the Asian session on Friday as traders opt to wait on the sidelines ahead of the latest inflation figures from China. Meanwhile, the focus remains on the US NFP report, which will influence the Fed's rate-cut path and drive the US Dollar. In the meantime, the divergent Fed-RBA outlooks could act as a tailwind for the currency pair. At current levels, spot prices remain on track to end the week on a flattish note.
USD/JPY reacts little to Japan's Household Spending data as focus remains on US NFP
USD/JPY is trading with a positive bias for the fourth consecutive day, hovering near the top end of its weekly range, at around 157.00. Meanwhile, an unexpected rise in Japan's Household Spending keeps the door open for further policy tightening by the BoJ. This marks a significant divergence compared to dovish Fed expectations, which acts as a headwind for the US Dollar and might cap the currency pair ahead of the crucial US NFP report, due later today.
Gold edges lower as bulls opt to wait for the crucial US NFP report
Gold struggles to capitalize on the previous day's goodish move up from the vicinity of the $4,400 mark and attracts some sellers during the Asian session on Friday as bulls seem reluctant ahead of the US NFP report. The critical US employment details will offer more cues about the Fed's rate-cut path, which, in turn, will influence the US Dollar price dynamics and provide a fresh impetus to the non-yielding bullion. In the meantime, dovish Fed expectations and rising geopolitical tensions might continue to act as a tailwind for the XAU/USD.
XRP slides as institutional and retail demand falters
Ripple (XRP) is trading down for the third consecutive day on Thursday amid escalating volatility in the cyrptocurrency market. After peaking at $2.41 on Tuesday, its highest print since November 14 amid the early-year rally, XRP has quickly ran into aggressive profit-taking.
2026 economic outlook: Clear skies but don’t unfasten your seatbelts yet
Most years fade into the background as soon as a new one starts. Not 2025: a year of epochal shifts, in which the macroeconomy was the dog that did not bark. What to expect in 2026? The shocks of 2025 will not be undone, but neither will they be repeated.
Majors
Cryptocurrencies
Signatures
USD/JPY YEARLY FORECAST
How could USD/JPY move this year? Our experts make a USD/JPY update forecasting the possible moves of the yen-dollar pair during the whole year.
USD/JPY FORECAST 2025
In the USD/JPY 2025 Forecast , FXStreet analyst Yohay Elam indicates that USD/JPY is likely to start the year bearish due to fears of trade wars, Donald Trump's entry into the White House and expected Federal Reserve (Fed) rate cuts. However, a bullish turnaround is anticipated in the following months as Trump's trade deals stabilize global markets, weakening the safe-haven Yen. Further gains are expected in the latter half of the year, driven by a more hawkish Fed and disappointment in the Bank of Japan’s (BoJ) inaction on rate hikes.
From a technical point of view, USD/JPY remains in a long-term uptrend for 2025, supported by its position above the 50-week SMA. Key resistance levels include 156.97, 161.81, and 170.43, with the latter aligning with the 138.2% Fibonacci extension. On the downside, support lies at 147.54, 139.73, and further down at 136.72 and 127.15.
MOST INFLUENTIAL FACTORS IN 2025 FOR USD/JPY
The year will be politically marked by Trump’s return to the White House. A Republican government is seen as positive for financial markets, but Trump’s pledge to cut taxes and impose tariffs on foreign goods and services may introduce uncertainty to both the political and economic landscape.
In Japan, political uncertainty looms, as the ruling Liberal Democratic Party (LDP) lacks a parliamentary majority and may call fresh elections. An LDP victory could strengthen the Yen by ensuring stability, while opposition gains might lead to fiscal expansion and weaken the currency. If no elections occur, a modest budget would likely keep the Yen supported.
In terms of monetary policy, the Fed and BoJ are set to diverge in monetary policy. The Fed expects to deliver only two additional rate cuts in 2025, the BoJ is expected to maintain its dovish stance, avoiding rate hikes amid weak inflation and a shrinking economy, leaving the Yen vulnerable to market disappointment over policy inaction.
Influential Institutions & People for the USD/JPY
The US Dollar Japanese Yen can be seriously affected by news or the decisions taken by two main central banks:
The Federal Reserve (Fed)
The Federal Reserve (Fed) is the central bank of the United States (US) and it has two main targets: to maintain the unemployment rate at its lowest possible levels and to keep inflation around 2%. The Federal Reserve System's structure is composed of the presidentially appointed Board of Governors and the partially appointed Federal Open Market Committee (FOMC). The FOMC organizes eight scheduled meetings in a year to review economic and financial conditions. It also determines the appropriate stance of monetary policy and assesses the risks to its long-run goals of price stability and sustainable economic growth. The FOMC Minutes, which are released by the Board of Governors of the Federal Reserve weeks after the latest meeting, are a guide to the future US interest-rate policy.
Fed official website , on X and Facebook
The Bank of Japan (BOJ)
The Bank of Japan (BoJ) is the central bank of Japan. Established under the Bank of
Japan Act in 1882, it is a juridical entity and neither a government agency nor a private corporation. The BoJ
sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary
control to ensure price stability, which means an inflation target of around 2%.
Policy Board: The Policy Board is the bank's highest decision-making body. It determines the
guidelines
for currency and monetary control, sets the basic principles for carrying out the bank's operations and oversees
the performance of the bank's officers, excluding auditors and counselors.
History: The Bank of Japan was established under the Bank of Japan Act, promulgated in June
1882, and began operating as the nation's central bank on October 10, 1882. It was reorganized in 1942 under the
Bank of Japan Act of 1942,
which reflected the wartime context. The Act of 1942 was amended several times after World War II, and the
establishment of the Policy Board as the bank's highest decision-making body occurred in June 1949. In June
1997, the Act of 1942 was revised completely under the principles of independence and transparency. The revised
Act came into effect on April 1, 1998.
The official website , on X and YouTube
Jerome Powell
Jerome Powell took office as chairman of the Board of Governors of the Federal Reserve System in February 2018, for a four-year term ending in February 2022. He was sworn in on May 23, 2022, for a second term as Chairman ending May 15, 2026. Born in Washington D.C., he received a bachelor’s degree in politics from Princeton University in 1975 and earned a law degree from Georgetown University in 1979. Powell served as an assistant secretary and as undersecretary of the Treasury under President George H.W. Bush. He also worked as a lawyer and investment banker in New York City. From 1997 through 2005, Powell was a partner at The Carlyle Group.
Jerome Powell Fed's Profile and Wikipedia
Kazuo Ueda
Kazuo Ueda was born in Makinohara, Japan, on September 20, 1951. He is the 32nd and current Governor of the BoJ. He graduated from the University of Tokyo with a Bachelor of Science and Mathematics and received a PhD in economics from the Massachusetts Institute of Technology (MIT).
He is a professor emeritus at the University of Tokyo and also worked as a professor at Kyoritsu Women's University. In February 2023, former Prime Minister Fumio Kishida nominated Ueda as the governor of the BoJ. He is widely regarded as an expert on monetary policy but was considered a surprise appointment by analysts. He wasn’t even considered a dark-horse candidate, as the BoJ governor role has traditionally gone to long-serving Finance Ministry bureaucrats or central bank officials. Ueda is the first academic economist to lead the BoJ in the post-World War II era.
Ueda’s Wikipedia profile
BOJ NEWS & ANALYSIS
FED NEWS & ANALYSIS
About USD/JPY
The USD/JPY (US Dollar Japanese Yen) currency pair is one of the 'Majors', a group of the most important currency pairs in the world. The Japanese Yen, known for its low interest rate, is frequently used in carry trades, making it one of the most traded currencies worldwide. In the USD/JPY pair, the US Dollar is the base currency and the Japanese Yen serves as the counter currency.
Trading USD/JPY is also known as trading the "ninja" or the "gopher", although the latter nickname is more frequently associated with the GBP/JPY pair. USD/JPY usually has a positive correlation with other pairs like USD/CHF and USD/CAD, as all three use the US Dollar as the base currency. The value of the pair is often influenced by interest-rate differentials between the two central banks: the Federal Reserve (Fed) and the Bank of Japan (BoJ).
Related pairs
GBP/USD
The GBP/USD (or Pound Dollar) currency pair belongs to the group of 'Majors', referring to the most important and widely traded pairs in the world. The pair is also known as “the Cable”, a term originating in the mid-19th century that refers to the first transatlantic telegraph connecting Great Britain and the United States. As a closely watched and widely traded currency pair, it features the British Pound as the base currency and the US Dollar as the counter currency. For that reason, macroeconomic data from both the United States and the United Kingdom significantly impacts its price. One notable event that affected the volatility of the pair was Brexit.
EUR/USD
The EUR/USD (or Euro Dollar) currency pair belongs to the group of 'Majors', a term used t o describe the most important currency pairs in the world. This group also includes GBP/USD, USD/JPY, AUD/USD , USD/CHF, NZD/USD and USD/CAD . The popularity of the Euro Dollar pair stems from its representation of two of the world’s largest economies: the Eurozone and the United States.
The EUR/USD is one of the most widely traded currency pairs in the Forex market, where the Euro serves as the base currency and the US Dollar as the counter currency. It accounts for more than half of the total trading volume in the Forex market, making gaps almost inexistent, let alone sudden reversals caused by breakaway gaps.
The EUR/USD is usually quiet during the Asian session, as economic data influencing the pair is usually released during the European or US sessions. Activity increases as European traders begin their day, leading to heightened trading volume. This activity slows around midday during the European lunch break but picks up again when US markets come online.