The meme coin reckoning has come

Memeinated animation

Next 100x presale starting soon


USD/JPY prediction: forecast as Japan economy, Nikkei 225 booms

on Jun 8, 2023
  • The USD/JPY pair is loitering at the highest point since November last year.
  • The pair has jumped by over 10% from its lowest point this year.
  • The Fed and Bank of Japan divergence could continue in the near term.

Follow Invezz on Telegram, Twitter, and Google News for instant updates >

The USD/JPY exchange rate moved sideways after the strong Japanese GDP numbers. The pair was trading at 140, where it has been in the past few days. This price is close to the highest level since November 2022. It has jumped by more than 10% from the lowest point this year.

Japan economy is doing well

Copy link to section

The Japanese economy is doing well as foreign investors continued allocating capital to the country. As I wrote in this article, the Nikkei 225 and Topix indices have surged to multi-decade highs. 

Data published on Thursday confirmed this view. According to the statistics agency, the economy expanded by 0.7% on a QoQ basis. This increase was better than the median jump of 0.4%. 

The economy expanded by 2.7% on a year-on-year basis, a big improvement from Q4’s growth of 0.4%. This figure was better than the expected growth of 1.6%.

A closer look at the key drivers of the country’s economic growth was capital expenditure by companies, which jumped by 1.4%. External demand dropped by 0.3% while consumer spending jumped by just 0.5% during the quarter.

These numbers imply that the country’s economy is doing better than expected. The USD/JPY pair weakened because the data will likely have no major impact on the actions by the Bank of Japan (BoJ) when it meets next week.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

Expectations are that the BoJ will maintain its interest rates and quantitative easing policies unchanged in a bid to stimulate the economy. 

The Federal Reserve, on the other hand, has been a bit hawkish in the past few months and it is unclear what it will do this month. Some analysts believe that the bank will have a hawkish pause while others see it delivering another hike.

USD/JPY technical analysis

Copy link to section

USD/JPY chart by TradingView

The USD to JPY pair has been in a strong bullish trend in the past few months as the Japanese yen weakness continued. It jumped to a high of 141 in May and remains above the 50-day moving average. The pair has flipped the key resistance at 137.77 into a support level. This price was the upper side of the ascending triangle pattern.

Further, the Relative Strength Index (RSI) has continued rising and is now approaching the overbought level.

Therefore, the pair will likely continue rising as the Fed and BoJ divergence continues. If this happens, the next level to watch will be 145.


Looking to capitalise on rising & falling USD, GBP, EUR rates? Trade forex in minutes with our top-rated broker, eToro.


77% of retail CFD accounts lose money.