USDJPY gains bearish momentum as the yen rushes to new peaks

The USDJPY rate is falling sharply, with sellers aiming to test the 148.55 support level. Find more details in our analysis for 31 March 2025.

USDJPY forecast: key trading points

• The Bank of Japan reiterated its readiness to continue raising interest rates
• Japan’s retail sales rose by 1.4% in February 2025
• USDJPY forecast for 31 March 2025: 147.15

Fundamental analysis

The USDJPY rate continues to decline for the second consecutive trading session as the yen strengthens amid growing investor concerns over potential new US tariffs. Hawkish signals from the Bank of Japan also provide support to the Japanese currency. The regulator reiterated its readiness to keep raising interest rates.

Meanwhile, Japan’s retail sales increased by 1.4% year-on-year in February 2025, significantly lower than the upwardly revised 4.4% growth a month earlier and below market expectations of 4.0%. According to today’s USDJPY forecast, such data may limit further downside in the pair.

Sharp yen fluctuations prompted Finance Minister Katsunobu Kato to stress that excessive exchange rate volatility is unacceptable. He noted that exchange rates should be determined by the market, and erratic fluctuations could undermine economic and financial stability.

USDJPY technical analysis

USDJPY quotes consolidated below the lower boundary of a bullish channel, confirming a shift in the short-term trend. Today’s USDJPY forecast expects a bearish scenario to develop, with the price breaking below the 148.55 support level and potentially declining to 147.15. This outlook is supported by the Stochastic Oscillator, which has broken below the support line, indicating ongoing selling pressure.

Summary

While the USDJPY rate remains under pressure, weak retail sales in Japan may limit further downside. The USDJPY technical analysis points to a decline to 147.15.