USDJPY surges as slump in Japan’s business activity crushes the yen

The USDJPY rate is strengthening, with buyers aiming to test the 150.15 resistance level. Find out more in our analysis for 24 March 2025.

USDJPY forecast: key trading points

• The au Jibun Bank Japan Composite PMI fell to 48.5 in March
• The Bank of Japan’s governor says the regulator will continue to raise interest rates
• Moving averages confirm the bullish trend in USDJPY
• USDJPY forecast for 24 March 2025: 151.15

Fundamental analysis

The USDJPY rate is rising for the second consecutive session as the Japanese yen remains under pressure from weakening business activity. According to preliminary data, the au Jibun Bank Japan Composite PMI fell to 48.5 in March from 52.0 in February, marking the first contraction in the private sector since October and the sharpest decline since February 2022. Manufacturing has been in decline for the ninth consecutive month, and the services sector has now also entered contraction territory.

Meanwhile, Bank of Japan Governor Kazuo Ueda emphasised that the regulator will continue to raise interest rates if core inflation nears 2%. Markets still expect the BoJ to tighten its monetary policy this year amid persistent inflationary pressure and rising wages. According to today’s USDJPY forecast, these factors may limit further weakening of the yen.

USDJPY technical analysis

The USDJPY rate has secured above the upper boundary of a Head and Shoulders reversal pattern, with prices currently consolidating above the 149.65 level. The USDJPY forecast expects bullish momentum to continue, pushing the pair up to 151.15. Technical indicators support the bullish outlook, with Moving Averages signalling a continued uptrend and the Stochastic Oscillator remaining in overbought territory but still pointing upwards. Further growth will be confirmed by a rebound from the neckline of the reversal pattern and the price consolidation above 150.05.

Summary

The USDJPY rate continues to climb amid deteriorating business activity in Japan. The USDJPY technical analysis indicates continued bullish momentum, with the next upside target at 151.15.