Insights 
VT 
Key Points:
- USD/JPY rose to 147.5, up from 145.856, extending its rally as the yen posts back-to-back losses.
- Tokyo’s July core inflation came in below forecast, but still above 2%, raising mixed expectations around BOJ policy.
The Japanese yen continued its slide against the dollar on Friday, with USD/JPY closing at 147.311 after hitting a high of 147.496. The currency pair gained for a second straight session, rising from a low of 145.856 as traders assessed the fallout from the new U.S.-Japan trade deal and fresh inflation data out of Tokyo.
The revised agreement introduced a 15% tariff on Japanese exports, down from the 25% rate previously threatened by the Trump administration.
While this offers some relief to Japan’s exporters, it keeps trade tensions front of mind and suggests a delicate path forward for the Bank of Japan (BOJ).
On the economic front, Tokyo’s core inflation for July printed slightly below expectations but remained elevated, staying above the BOJ’s 2% inflation target. This added fuel to speculation of a potential rate hike later in the year, even as the central bank is expected to hold rates steady at next week’s policy meeting.
Technical Analysis
The 15-minute chart for USD/JPY shows a clean bullish structure. Price opened at 146.982 and closed at 147.311, breaking upward through multiple resistance levels.
The MACD (12,26,9) is trending above the zero line with a fresh bullish crossover, and moving averages (5,10,30) are stacked below price, reinforcing upward momentum. The trend currently reads 0.22%.
Picture: USDJPY firms above 147.30 as dollar momentum holds, as seen on the VT Markets app
BOJ Deputy Governor Shinichi Uchida earlier this week struck a cautious tone, signalling that the central bank remains wary of tightening too soon due to the fragile global trade landscape.
Nonetheless, speculation is building that the BOJ may revise its inflation forecast upward in its upcoming quarterly outlook, especially if energy and import costs continue to rise under the weight of currency depreciation.
Cautious Forecast
If USD/JPY breaks above 147.50, bulls could target the 148.20 zone next. However, with the BOJ set to meet and inflation dynamics in flux, traders should prepare for sharp moves in either direction next week. A pullback toward the 146.80 region remains on the table if policy commentary leans more hawkish than expected.
