US Dollar To Yen Exchange Rate Forecast: "USD/JPY Momentum Signals Are Increasingly Bearish"

The USD to JPY exchange rate forecast looks bearish according to leading foreign exchange analysts.

Dollar to Yen exchange rate forecast

The USD/JPY exchange rate edged lower today after Japanese growth was revised higher in the first-quarter.

The US dollar to yen exchange rate remained on the back foot during Thursday's trading session, wing to BoJ comments.

Thanks to the latest comments from Bank of Japan (BoJ) official Hiroshi Nakaso, the Yen has made major gains against its peers.

Nakaso has spoken in favour of the BoJ’s negative interest rate decision, stating that it has already benefited the economy.

Latest forecasts see the USD/JPY trending lower:

"USDJPY has tested a fresh one month low, falling toward the May 3 multi-year low at 105.55. Momentum signals are increasingly bearish and DMI’s suggest a continued shift in the balance of risk. The 9 day MA is below the 21 day MA and both are trending downward." Scotiabank 09/06/2016

Latest Dollar/Yen Exchange Rates

On Friday the Japanese Yen to British Pound exchange rate (JPY/GBP) converts at 0.005

Today finds the pound to japanese yen spot exchange rate priced at 195.143.

FX markets see the pound vs pound exchange rate converting at 1.

The GBP to CHF exchange rate converts at 1.142 today.

NB: the forex rates mentioned above, revised as of 26th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.

Other Foreign Exchange News

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Unexpectedly weak Chinese inflation data prompted investors to flock back into safe-haven demands on Thursday morning, pushing up the Japanese Yen (JPY) against rivals.

This naturally overshadowed the impact of far weaker-than-expected Japanese Machine Orders figures, which showed a -8.2% slump on the year in April and indicated that the domestic economy remains in a state of slowness.

Tomorrow’s Japanese Machine Orders data could put the Yen on the back foot once again, with orders forecast to have contracted -1.9% on the year in April.

However, as markets have shown a tendency to ignore overly negative domestic data in recent weeks the USD/JPY exchange rate may yet extend its losses due to the limited appeal of the ‘Greenback’

Although Japanese ecostats produced mixed results erring towards negativity, the positive revision to first-quarter Gross Domestic Product saw Japanese Yen exchange rates improve.

Political uncertainty continues to limit the appeal of the US Dollar now that the Presidential candidates have been all but confirmed.

With an absence of high-impact US ecostats to provoke changes, there is a high chance that the USD/JPY exchange rate will hold losses throughout Wednesday’s European session.

Dollar to Yen exchange rate chart

Political Uncertainty Weighs on US Dollar (USD) Exchange Rates

Whilst controversial Republican frontrunner Donald Trump secured presidential candidacy some time ago, the leader of the Democrats has only just been confirmed.

For the first time in US history a woman, Hillary Clinton, will run for president. However, Clinton’s policies have divided voters as much as Trump’s have, fuelling political uncertainty with the race likely to be close.

With a distinct lack of influential domestic data due for publication today, the US Dollar is likely to hold losses versus most its major peers.

yen to dollar exchange rate chart

Citibank Predict Japanese Yen (JPY) Exchange Rate Losses on Further Intervention from Bank of Japan

Although domestic data provided mostly disappointing results today, the Japanese Yen advanced versus many of its major peers.

The appreciation was the result of an upward revision to first-quarter Gross Domestic Product.

Despite this, however, analysts at Citibank forecast further stimulus measures from the Bank of Japan (BOJ), stating;

‘JPY may find upside pressure in the short term amid concern that the BOJ may defer expanding policy easing and a drop in USD. However, we expect inflation may miss the BOJ's expectation, which may force the central bank to expand policy easing in July, which may restrain JPY.’

Japanese data releases ahead

The upcoming contributions from Japan’s economy will mainly consist of the April annual motor orders and foreign bond buying in early June.

Also of note will be a speech from the Bank of Japan’s Hiroshi Nakaso, slightly later than the orders and bonds data.

Colin Lawrence

Contributing Analyst

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