The Japanese Yen slipped against the U.S. Dollar on Thursday, with USD/JPY trading near 142.50, holding modest intraday gains. A mix of solid U.S. economic data and hawkish commentary from Federal Reserve Chair Jerome Powell helped the dollar rebound, while a brighter global risk sentiment pressured traditional safe-haven assets like the yen.
The U.S. Dollar gained traction following a 1.4% rise in March retail sales, exceeding expectations and marking a sharp rebound from February’s revised 0.2% uptick. Powell further buoyed sentiment by signaling no immediate plans for rate cuts, despite global trade tensions and inflationary uncertainty.
Meanwhile, market risk appetite improved after China downplayed tariff escalations, lifting Asian equities and U.S. stock futures. That momentum softened demand for the Japanese Yen, which typically sees inflows during market stress.
Key Levels and Technical Outlook
USD/JPY continues to consolidate in a narrow range, with traders eyeing critical technical thresholds:
Resistance Levels:
- 143.00 – Psychological and static barrier
- 143.60 – Minor swing high
- 144.00–145.00 – Multi-month cap and potential breakout zone
Support Levels:
- 142.00 – Round number and near-term support
- 141.60 – Multi-month low
- 140.80 – Deeper support if momentum weakens
Technical indicators remain mixed. The pair is above the 20-period SMA, but daily chart oscillators suggest caution, signaling potential downside risk if momentum fades.
BoJ Cautious Amid Trade Deal Hopes
While U.S. data boosted the dollar, developments in Japan offered limited support for the yen. BoJ Governor Kazuo Ueda hinted at a pause in the central bank’s tightening cycle, warning that U.S. tariffs could weigh on Japan’s fragile recovery. Additionally, reports suggest the BoJ will cut growth forecasts at its April 30–May 1 policy meeting.
However, there is optimism surrounding U.S.-Japan trade negotiations. Japan’s Prime Minister Shigeru Ishiba described talks in Washington as “constructive,” and Economy Minister Ryosei Akazawa said both sides aim to finalize a deal within a 90-day window.
Notable Quotes and Updates:
- Kenzo Yamamoto, former BoJ executive, sees delayed rate hikes until trade clarity
- Junko Nagakawa, BoJ board member, suggests rate increases could resume in 2025
- U.S. imposes export limits on AI chips, as China retaliates with 125% tariffs
Despite this, markets still expect the Fed to cut rates up to three times in 2025, reflecting concerns over tariff-driven growth risks.
Outlook:
USD/JPY may remain supported near-term by a firmer dollar and risk-on mood, but longer-term pressure from BoJ normalization and trade optimism could cap gains. Traders now await fresh data, including U.S. jobless claims and housing figures, for directional cues.
