The market is on the sidelines before the Fed and Bank of Japan's policy decisions, with USD/JPY fluctuating slightly, waiting for a direction to be chosen.
2025-07-30 13:57:23
The yen strengthened slightly in Asian trading on Wednesday after hitting a one-week low on Tuesday, mainly benefiting from risk aversion in the market ahead of the Federal Reserve and Bank of Japan's decisions.
However, the yen's upward momentum is limited: Japan's economic data is weak: Tokyo's consumer inflation cooled more than expected in July, reducing the possibility of a short-term interest rate hike by the BoJ.
Domestic political uncertainty: Japan's ruling coalition (Liberal Democratic Party and Komeito) lost the upper house election, further complicating the path to BoJ policy normalization.
US trade deal eases safe-haven demand: Recent progress in US-Japan and US-EU trade negotiations has suppressed safe-haven buying of the yen.
At the same time, the Federal Reserve is still widely expected by the market to maintain an interest rate range of 4.25%-4.50%, and may release a more hawkish policy outlook to address the inflation risks brought about by high tariffs.
Focus this week: FOMC decision (Wednesday) and Powell press conference: If it suggests maintaining high interest rates for a longer period of time, it will support the US dollar and limit the room for the yen to rebound.
BoJ decision (Thursday) and outlook report: The market expects no change, but if the tone is hawkish or suggests a rate hike this year, the yen may be supported.
US macroeconomic data: Q2 GDP preliminary value (Wednesday), core PCE price index (Thursday) and non-farm payroll report (Friday) will all affect the trend of the US dollar and the yen.
On the daily chart, USD/JPY faces strong resistance in the 148.50-149.10 area, with bulls and bears battling repeatedly around 148. A break below the key support level of 147.70 could trigger further declines, targeting the 147.00 round number. A break below this level would open up further downside, potentially targeting the 145.80-146.00 area for bears.
148.80 has become a must-break area for short-term bulls. 149.55 (200-day SMA and monthly high): If it breaks through and holds, it may trigger a new round of bullish market, targeting the 150.00 round number mark and further challenging 151.00.
In terms of technical indicators, the RSI remains around 50-55, indicating that the market is still in a neutral and volatile phase, and the direction selection needs to be driven by major news.
Editor's opinion:
USD/JPY is currently in a wait-and-see, volatile market during a period of intensive policy action. If the Fed's hawkish signals exceed expectations and the Bank of Japan maintains its dovish stance, the exchange rate is expected to challenge 149.55 and further break through the 150 mark. If the Fed adopts a dovish tone and the Bank of Japan signals a rate hike this year, the yen may see a strong rebound. Focus on the breakout direction of the 147.70-149.55 range.
However, the yen's upward momentum is limited: Japan's economic data is weak: Tokyo's consumer inflation cooled more than expected in July, reducing the possibility of a short-term interest rate hike by the BoJ.
Domestic political uncertainty: Japan's ruling coalition (Liberal Democratic Party and Komeito) lost the upper house election, further complicating the path to BoJ policy normalization.
US trade deal eases safe-haven demand: Recent progress in US-Japan and US-EU trade negotiations has suppressed safe-haven buying of the yen.
At the same time, the Federal Reserve is still widely expected by the market to maintain an interest rate range of 4.25%-4.50%, and may release a more hawkish policy outlook to address the inflation risks brought about by high tariffs.
Focus this week: FOMC decision (Wednesday) and Powell press conference: If it suggests maintaining high interest rates for a longer period of time, it will support the US dollar and limit the room for the yen to rebound.
BoJ decision (Thursday) and outlook report: The market expects no change, but if the tone is hawkish or suggests a rate hike this year, the yen may be supported.
US macroeconomic data: Q2 GDP preliminary value (Wednesday), core PCE price index (Thursday) and non-farm payroll report (Friday) will all affect the trend of the US dollar and the yen.
On the daily chart, USD/JPY faces strong resistance in the 148.50-149.10 area, with bulls and bears battling repeatedly around 148. A break below the key support level of 147.70 could trigger further declines, targeting the 147.00 round number. A break below this level would open up further downside, potentially targeting the 145.80-146.00 area for bears.
148.80 has become a must-break area for short-term bulls. 149.55 (200-day SMA and monthly high): If it breaks through and holds, it may trigger a new round of bullish market, targeting the 150.00 round number mark and further challenging 151.00.
In terms of technical indicators, the RSI remains around 50-55, indicating that the market is still in a neutral and volatile phase, and the direction selection needs to be driven by major news.
Editor's opinion:
USD/JPY is currently in a wait-and-see, volatile market during a period of intensive policy action. If the Fed's hawkish signals exceed expectations and the Bank of Japan maintains its dovish stance, the exchange rate is expected to challenge 149.55 and further break through the 150 mark. If the Fed adopts a dovish tone and the Bank of Japan signals a rate hike this year, the yen may see a strong rebound. Focus on the breakout direction of the 147.70-149.55 range.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
