During the Asian trading session on June 5, 2025, the Japanese yen gave back some of its recent gains against the U.S. dollar, pausing the rebound that began the previous day. Despite this slight pullback, overall momentum remains in favor of the yen, driven by rising expectations that the Bank of Japan may continue tightening its monetary policy.
As of now, USD/JPY is trading near 143.61, with short-term price action leaning bearish. From a technical perspective, the pair has slipped below a key support zone, indicating growing selling pressure on the dollar. Further downside cannot be ruled out.
That said, a short-term technical rebound toward resistance near 144.85 is possible. However, unless the pair can establish a firm foothold above that level, the downtrend could resume, potentially revisiting — or even breaking below — the 140.25 support area.
One of the factors supporting the yen’s strength is the Bank of Japan’s increasingly hawkish stance. Since ending its 17-year negative interest rate policy in March 2024, the BoJ has raised rates three times. The most recent hike, in January 2025, brought the unsecured overnight call rate from 0.25% to 0.5%. This gradual normalization signals a shift in policy that could lend further support to the yen going forward.
Technically, USD/JPY appears to be forming a symmetrical triangle pattern. The RSI (Relative Strength Index) remains elevated, but without a clear breakout to the upside, the risk of further downside persists.
A break above the 146.85 resistance level would invalidate the current bearish bias and could open the door for a move toward 149.75 or higher. Conversely, a drop below 141.35 would confirm a downside breakout from the triangle pattern, potentially triggering a sharper decline.
Looking back at the first half of 2025, the yen has performed well against the dollar. So far this year, USD/JPY is down roughly 9.25%, reflecting broad dollar weakness. Meanwhile, the yen has appreciated by about 10.19% against the dollar — a solid gain.
In summary, with dollar weakness and BoJ policy normalization taking center stage, bullish momentum in the yen currently holds the upper hand. However, investors should remain alert to signals from upcoming BoJ policy moves, shifts in U.S. economic data, and the Fed’s evolving stance — all of which will shape the next moves in USD/JPY. In a market where risks and opportunities go hand in hand, watching key technical levels and policy developments is critical for strategic positioning.
