USD/JPY Technical Outlook: Yen Faces Headwinds Amid Diverging Central Bank Policies

The USD/JPY currency pair is experiencing upward momentum, approaching the ¥150 mark, driven by a combination of technical factors and market expectations.

Technical Analysis

As of August 12, 2025, USD/JPY is testing the significant resistance level around ¥150, coinciding with the 200-day Exponential Moving Average (EMA). A successful breakout above this level could pave the way for further gains, with the next resistance target at ¥149.50. Conversely, failure to breach this resistance may lead to a pullback towards the ¥147.75–147.80 support zone. The Relative Strength Index (RSI) is currently above 50, indicating bullish momentum, while the Average Directional Index (ADX) suggests a strengthening trend. Forex Crunch

Fundamental Drivers

• U.S. Economic Data: The upcoming U.S. Consumer Price Index (CPI) report is anticipated to influence Federal Reserve rate cut expectations. A higher-than-expected CPI could delay anticipated rate cuts, potentially strengthening the USD. Forex Crunch
• Bank of Japan (BoJ) Policy: The BoJ’s recent upward revision of its inflation forecast signals a potential shift towards policy normalization. However, domestic political uncertainties and concerns over the impact of U.S. tariffs on Japan’s economy may delay any immediate rate hikes.

Market Sentiment

Investor sentiment remains cautious, with traders awaiting the U.S. CPI data before making significant moves. The divergence in monetary policies between the Federal Reserve and the BoJ continues to influence the USD/JPY pair’s trajectory.

Outlook

Should the USD/JPY pair successfully break above the ¥150 resistance level, the next target would be ¥149.50. Conversely, a failure to breach this resistance could lead to a consolidation phase or a pullback towards the ¥147.75–147.80 support zone. Market participants should remain vigilant to the upcoming U.S. CPI report, as it will likely play a pivotal role in determining the pair’s near-term direction.

Note: All technical levels and projections are subject to change based on market conditions and economic data releases.

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