USDJPY is under pressure due to expectations of BoJ policy tightening

The USDJPY rate is squeezed within the Triangle pattern, with the price currently at 149.58. Discover more in our analysis for 28 February 2025.

USDJPY forecast: key trading points

• The pair is under pressure from expectations of further monetary tightening by the Bank of Japan
• Tokyo core inflation fell to 2.2% in February 2025
• Japan’s retail sales rose by 3.9% in January 2025
• USDJPY forecast for 28 February 2025: 146.80

Fundamental analysis

The USDJPY rate is undergoing a correction, with buyers managing to hold the 148.85 support level. Nevertheless, the pair remains under pressure amid expectations of monetary tightening by the Bank of Japan.

Tokyo core inflation in February 2025 eased to 2.2% from 2.5% in January. However, inflation has remained above the BoJ target of 2.0% for the fourth consecutive month, supporting the regulator’s hawkish stance.

The possibility of new US trade tariffs under Donald Trump poses risks to Japan’s economic growth, potentially restraining further tightening of the BoJ monetary policy. This may limit the pair’s decline as part of the USDJPY forecast for today.

USDJPY technical analysis

The USDJPY rate is consolidating within the Triangle pattern, signalling a potential continuation of the downtrend. The Stochastic Oscillator confirms the bearish scenario as its values are testing the resistance level, and the %K and %D lines have crossed from top to bottom. The USDJPY forecast for today suggests a rebound from the Triangle’s upper boundary towards 146.80.

Summary

The USDJPY rate remains under pressure amid expectations of BoJ monetary tightening. The USDJPY technical analysis indicates the potential for a rebound from the Triangle’s upper boundary, followed by a decline to the 146.80 level.