USDJPY Technical Analysis – The JPY gets a boost from higher Tokyo CPI data

Fundamental Overview

The USD performance has been mixed this week amid general uncertainty ahead of the April 2 tariffs plan announcement. The greenback got a bit of a boost recently as Trump announced 25% tariffs on auto imports on Wednesday but those gains eventually waned. Overall, the market is still pricing between two to three rate cuts this year and the sentiment remains tentative ahead of the Trump’s “Liberation Day”.

On the JPY side, we got higher than expected Tokyo CPI figures today which gave the Yen a boost as traders continue to focus on the inflation data to decide whether the BoJ could hike more than twice by the end of the year. Overall, the market is still pricing around 34 bps of tightening by year-end with particular focus now on the unveiling of the US tariffs plan next Wednesday.

USDJPY Technical Analysis – Daily Timeframe

On the daily chart, we can see that after breaking above the major trendline, the pair continued to drift higher. There’s not much else we can glean from this timeframe so we need to zoom in to see some more details.

USDJPY Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have an upward trendline defining the bullish momentum on this timeframe. From a risk management perspective, the buyers will have a better risk to reward setup around the trendline to position for further upside. The sellers, on the other hand, will look for a break below the trendline to regain control and pile in for a drop into the 140.00 handle next.

USDJPY Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor upward trendline. On an intraday basis, we can expect the buyers to lean on the trendline with a defined risk below it to position for a rally into new highs, while the sellers will look for a break lower to pile in for a drop into the major trendline next. The red lines define the average daily range for today.

Upcoming Catalysts

Today we conclude the week with the US PCE report and the final University of Michigan survey where long term inflation expectations will be in focus.

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