USD/JPY Slips to 145.50 as BoJ Rate Bets and Trade Talks Support Yen

By: fxleaders|2025/05/15 20:00:19
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The Japanese Yen was up on Thursday with USD/JPY falling to 145.50 in early European trade. Renewed hopes of a Bank of Japan (BoJ) rate hike and a US-Japan trade breakthrough boosted the Yen. BoJ Deputy Governor Shinichi Uchida said he would raise rates if inflation and economic conditions continue to align. Supporting this narrative, Japan’s April Producer Price Index (PPI) surprised to the upside, showing persistent inflationary pressure. Adding to the positive sentiment, Japanese officials are reportedly preparing for new trade talks in Washington next week. Markets are expecting concessions from both sides, which should boost the Yen in the short term. US Dollar Struggles with Policy Uncertainty The US Dollar was weak as markets wait for April’s PPI and Fed Chair Jerome Powell’s comments. Although a softer-than-expected CPI print earlier in the week supported rate cut bets, it didn’t do much for the Dollar. The Dollar Index (DXY) is below 101, reflecting a cautious mood. Fed officials reinforced this cautious tone. San Francisco Fed President Mary Daly called the current stance “moderately restrictive” while Chicago Fed President Austan Goolsbee advised patience. With inflation trending lower but still above target, the Fed will move gradually, limiting near-term Dollar upside. Technical Outlook: Bears in Control Below 146.50 Technically, USD/JPY is still in a descending channel, rejecting resistance at 146.54 (the 50-hour EMA and channel top). Momentum is weak as the MACD shows a shallow bullish crossover below zero, so upside attempts may fail. Support at 145.50, then 144.88 Resistance at 146.54, need a break above to change bias Price is bearish unless buyers take out the channel top

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