USD/JPY analysis on January 29, 2025
During Wednesday's Asian session, USD/JPY is trading at 155.27, working out a correction against the background of the publication of the minutes of the Bank of Japan meeting, where the regulator raised the interest rate to 0.50% for the first time since 2008.
According to the published report, the decision to tighten monetary policy was dictated by a steady increase in inflation - the consumer price index reached the target level of 2.0%, as well as positive wage dynamics, which confirms employers' intentions to continue indexing.
Despite the rate hike, the Bank of Japan remains active in government bond purchases, having repurchased debt securities worth 4.9 trillion yen since the beginning of the year.
The next act of monetary restriction may take place no earlier than June or July, and within two years, the cost of borrowing, according to the regulator's forecasts, may reach 1.50%, which will ensure the necessary control over inflationary risks.
The US dollar index is trading near 107.50. Statements by the US president remain a key catalyst for currency market volatility.
The day before, Donald Trump announced a new package of import tariffs on computer chips, pharmaceuticals and steel, arguing the measures needed to stimulate domestic production. These initiatives may increase trade friction, affecting the dynamics of the yen and the dollar.
An additional negative factor for the USD was consumer confidence data from the Conference Board: the index dropped from 109.5 to 104.1 points, reflecting growing uncertainty in the consumer environment.
USD/JPY technical analysis for today
On the daily chart, USD/JPY continues to adjust within the ascending channel with a range of 162.00–154.00, approaching the key support zone.
Technical indicators indicate a possible weakening of the uptrend.:
• The moving averages of the alligator indicator are approaching the signal line, narrowing the volatility range.
• The Awesome Oscillator (AO) histogram forms descending bars in the negative zone, signaling the possible development of a downward trend.
Trading recommendations for USD/JPY
Sale
• Entry: after fixing the price below 154.50
• Target: 151.00
• Stop-Loss: 156.00
Buy
• Entry: after fixing the price above 156.50
• Target: 160.60
• Stop-Loss: 155.00
In the coming days, the dynamics of USD/JPY will depend on the comments of the Bank of Japan, macroeconomic data from the United States, as well as geopolitical factors related to the trade policy of the new White House administration.