News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
Wall Street
More View more
Real Time News
  • 🇮🇹 Government Budget (2020) Actual: -9.5% Previous: -1.6%
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here:
  • 🇮🇹 Full Year GDP Growth (2020) Actual: -8.9% Previous: 0.3%
  • Indices Update: As of 11:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 1.88% France 40: 1.65% Germany 30: 1.32% US 500: 1.21% Wall Street: 1.10% View the performance of all markets via
  • Heads Up:🇮🇹 Full Year GDP Growth (2020) due at 11:00 GMT (15min) Previous: 0.3%
  • Heads Up:🇮🇹 Government Budget (2020) due at 11:00 GMT (15min) Previous: -1.6%
  • Fed's Barkin says would be disappointed if we didn't see bond yields rise as the outlook improves - WSJ
  • What are some factors affecting the USD this quarter? Get your free forecast here: #DailyFXGuides
  • 🇮🇹 Inflation Rate YoY Prel (FEB) Actual: 0.6% Previous: 0.4%
  • Thanks as always @JeremyNaylor_IG
USD/JPY Rate Vulnerable to Further Losses as Bearish Series Develops

USD/JPY Rate Vulnerable to Further Losses as Bearish Series Develops

David Song, Strategist

Japanese Yen Talking Points

USD/JPY remains under pressure, with the Yen largely unfazed by the mixed data prints coming out of Japan, and the exchange rate may continue to consolidate ahead of the Federal Open Market Committee (FOMC) interest rate decision on June 13 as it initiates a fresh series of lower highs & lows.

Image of daily change for major currencies

USD/JPY Rate Vulnerable to Further Losses as Bearish Series Develops

Image of daily change for USDJPY

Updates to Japan’s Gross Domestic Product (GDP) report should keep the Bank of Japan (BoJ) on track to further expand its balance sheet as the final reading shows a 0.6% contraction in the growth rate, and Governor Haruhiko Kuroda and Co. may carry the Quantitative/Qualitative Easing (QQE) Program with Yield-Curve Control into the year ahead as inflation continues to run below the 2% target,

However, the limited reaction to the fresh figures suggest USD/JPY will continue to take cues from Fed policy as the recent pullback coincides with the weakness in U.S. Treasury Yields, and the fresh updates from the Federal Open Market Committee (FOMC) is likely to impact the near-term outlook for dollar-yen as especially as Chairman Jerome Powell and Co. pledge to phase out the forward-guidance for monetary policy.

Image of Fed Fund Futures

Keep in mind, Fed Fund Futures are now showing narrowing expectations for four rate-hikes in 2018, with the benchmark interest rate seen ending the year around the 2.00% to 2.25% threshold, and more the same from the FOMC may keep USD/JPY under pressure as market participants scale back bets for a more aggressive hiking-cycle.

With that said, little to no changes in the longer-run interest rate forecast (dot-plot) may dampen the appeal of the greenback, with USD/JPY at risk of exhibiting a more bearish behavior over the near-term especially as both price and the Relative Strength Index (RSI) fail to preserve the bullish formations from earlier this year.


Image of USDJPY daily chart
  • USD/JPY stands at risk for further losses as it carves a fresh series of lower highs & lows after failing to make a run at the May-high (111.40).
  • Waiting for a close below the 109.40 (50% retracement) to 110.00 (78.6% expansion) region to favor a move back towards 108.30 (61.8% retracement) to 108.40 (100% expansion), with the next downside region of interest comes in around 106.70 (38.2% retracement) to 107.20 (61.8% retracement).

For more in-depth analysis, check out the Q2 Forecast for the Japanese Yen

Interested in having a broader discussion on current market themes? Sign up and join DailyFX Currency Analyst David Song LIVE for an opportunity to discuss potential trade setups!

Image of DailyFX economic calendar

Additional Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2018.

--- Written by David Song, Currency Analyst

Follow me on Twitter at @DavidJSong.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.