Insights 
VT 
Key Points:
- USD/JPY dips to ¥144.30, eyeing a sixth straight daily decline.
- Japan’s GDP contracts 0.2% in Q1, driven by a 0.6% drop in exports.
- BoJ signals willingness to hike again, but cautious over inflation’s impact on households.
The Japanese yen continued its slide on Monday, with USD/JPY breaking decisively below the psychologically key ¥145 level, settling near ¥144.50 after touching a low of ¥144.30. The decline marks the sixth consecutive down session for the pair, underscoring a significant momentum shift favouring the U.S. dollar — despite signs of slowing in the broader global macro outlook.
Japan’s economic data this week only added to bearish pressure on the yen. GDP contracted 0.2% in Q1, missing expectations of a 0.1% drop. Exports were the main drag, down 0.6%, as US tariffs continue to cloud trade outlooks. While domestic demand rose 0.6%, it wasn’t enough to offset the export slump.
Meanwhile, Bank of Japan Deputy Governor Shinichi Uchida added a twist, signalling that the central bank is open to further rate hikes if the economy rebounds from recent shocks. “If our forecast materializes, we will continue to raise our policy rate,” Uchida told lawmakers. But he also acknowledged that inflation — currently hovering around the BoJ’s 2% target — is pressuring households and dampening consumer sentiment.
Technical Analysis
The USDJPY pair has slipped into a consolidation-to-downtrend pattern following a recent high of 145.511, closing the session at 144.504. The 15-minute chart reveals a clear downward shift, with price action now trading below all key short-term moving averages (5, 10, and 30). The slope of the 30-MA has turned downward, confirming bearish pressure in the near term. The MACD histogram shows sustained red bars and a bearish crossover, suggesting momentum is still tilted lower.
Picture: USDJPY weakens below 145.00 as bears reclaim momentum; key support eyed near 144.30, as seen on the VT Markets app
Attempts at recovery on 20 May were quickly faded, and the pair has struggled to sustain any upward movement since the late 19 May rebound. Support is forming around 144.30, with immediate resistance around 144.80–145.00. A break below support could open the door to further declines, while bulls need a close above the 30-MA to regain control.
Cautious Forecast
For now, the dollar remains bid as traders rotate out of safe havens and shrug off the recent Moody’s downgrade of US debt. If this broader dollar strength holds, the yen may stay under pressure soon, especially without the BoJ’s surprise.
A sustained break below ¥144 could open a path toward ¥140, while any rebound faces resistance near ¥145.50. With Tuesday expected to be light on macro news, technical trading may dominate, making this an ideal window for chart-watchers and swing traders to test the pair’s resolve.
