USDJPY on Friday rose 0.35% to 149.28. Week ending 2025-03-21 rose 0.45%. What’s going on.

USDJPY Analysis

Performance
Period	Pct	Chg	Momentum
Friday	0.35%	51.6 Pips
Week 252025-03-21	0.45%	66.5 Pips	March	-0.84%	-127 Pips

Upcoming key events for the new week (London Time)

Thu 12:30 PM GDP annual rate
Thu 11:30 PM Tokyo CPI (Inflation Rate) (12-mth)
Fri 12:30 PM PCE Price Index, excluding food and energy (12-mth)

What happened over the week

In Japan, the data released by the Statistics Bureau of Japan showed a slight reduction in inflation rates in February. The overall National Consumer Price Index (CPI) inflation rate decreased to 3.7% from 4% in January, with the CPI inflation rate excluding fresh food also declining to 3% from 3.2% previously. However, the CPI inflation rate excluding food and energy saw a marginal uptick to 2.6% from 2.5%. Moreover, Japan’s trade balance improved significantly in February as reported by the Ministry of Finance Japan, shifting to a surplus of 584.5 billion yen from a deep deficit of 2,758.8 billion yen in January, supported by a strong increase in exports by 11.4% and a notable decrease in imports by 0.7% over the year.

In the United States, according to the Department of Labor, the initial unemployment insurance claims increased marginally to 223,000 in the week ending March 15, from a revised 221,000 previously. The Philadelphia Fed reported a decline in the Manufacturing Business Outlook Survey for March, which fell to 12.5 points from 18.1 points in the prior month, indicating some cooling in manufacturing sentiment. Additionally, according to the Federal Reserve, interest rate projections showed a downward revision, particularly noted in the first and second year projections dropping to 3.4% and 3.1%, respectively. The Federal Funds Rate remained unchanged at 4.5%, reaffirming a pause in rate hikes.

The USDJPY pair experienced gains over the past week, closing 0.45% higher, finishing at a two-week high, indicating market sentiment favoring the U.S. dollar against the Japanese yen. The stabilization in BOJ policies with the unchanged short-term policy interest rate at 0.5% alongside improving Japanese trade dynamics suggests a certain steadiness in yen prospects. However, the relative decline in U.S. interest rate projections and an unchanged Fed rate might drive a moderate shift in favorable movement toward the yen. Anticipated upcoming economic indicators, such as the U.S. GDP annual rate, Tokyo CPI, and PCE Price Index, excluding food and energy, could further influence the USDJPY trajectory. Notably, the elevated CPI readings and trade developments in Japan juxtaposed with U.S. rate pauses could foster opportunities for the yen to stabilize or strengthen slightly against the dollar if economic conditions align favorably.

From social media

The BOJ released the Statement on Monetary Policy after the March 18 and 19 Monetary Policy Meeting.https://t.co/LbwqBF8XEm pic.twitter.com/7qtdZHtQHB

— Bank of Japan (@Bank_of_Japan_e) March 19, 2025

What can we expect from USDJPY for the new week and what happened on Friday?

USDJPY on Friday rose 0.35% to 149.28. Price is above 9-Day EMA while Stochastic is falling. For the week ending ,2025-03-21, the pair rose 0.45% or 66.5 pips higher. USDJPY rose for the second-straight week to close at 2-week high.

Looking ahead, USDJPY looks bullish as the pair ended higher after Friday trading session.

For the new week, our technical outlook looks bullish, immediate upside resistance level at 150.22 (WR1) with break above could target 151.17 (WR2). On the downside, we are looking at week low of 148.18 as an important support. Break below this level could weaken the current bullish momentum. A break above 150.15 would suggest bullish bias after recent positive movement.

For the month of March, USDJPY is down by -0.84% or -127 pips lower.

Weekly key levels to watch out:

You might also be interested in:

U.S. International Transactions, 4th Quarter and Year 2024 Source: Bureau of Economic Analysis
Federal Reserve Board and Federal Open Market Committee release economic projections from the March 18-19 FOMC meeting Source: Federal Reserve
Federal Reserve issues FOMC statement Source: Federal Reserve
Statement on Monetary Policy Source: Bank of Japan
Statement on Monetary Policy Source: Bank of Japan
Trade Statistics (Februay 2025 [Provisional]) Source: Ministry of Finance
New Residential Construction Source: Census Bureau
Manufacturing and Trade Inventories and Sales Source: Census Bureau
Advance Monthly Sales for Retail and Food Services Source: Census Bureau