The USDJPY pair remains under pressure from the expected tightening of the Bank of Japan policy, with the price currently at 147.03. Find out more in our analysis for 1 September 2025.
USDJPY forecast: key trading points
- Mounting pressure on the USDJPY rate is due to expectations of a Bank of Japan rate hike by the end of the year
- Capital expenditures in Japan rose by 7.6% in Q2 2025
- Japan’s manufacturing PMI for August was revised down from 49.9 to 49.7
- USDJPY forecast for 1 September 2025: 145.95
Fundamental analysis
The USDJPY rate continues to post slight gains for the second consecutive trading session. Buyers are holding the price above the key support level at 146.05. However, the US dollar remains under pressure due to expectations of a Federal Reserve rate cut, which increases the risk of a breakout below the lower boundary of the sideways range, in which the pair has been trading for 22 sessions. Additional pressure comes from expectations that the Bank of Japan will hike rates by the end of the year amid rising wages, persistent inflation, and improving economic prospects.
Fresh Japanese data also grabbed investor attention. Capital expenditures rose by 7.6% in Q2 2025, beating forecasts of 6.2%. At the same time, the manufacturing PMI for August was revised downwards from 49.9 to 49.7, marking the 13th decline in the last 14 months.
USDJPY technical analysis
The USDJPY rate is trading within a narrowing range shaped by a Triangle pattern. The current dynamics indicate a high probability of a downside breakout, with a target at 145.95.
Today’s USDJPY forecast suggests a bearish scenario with the risk of consolidation below 146.70. The Stochastic Oscillator gives a bearish signal: its lines turned down after a rebound from the descending resistance line.
An additional bearish factor is buyers’ inability to consolidate above 147.35, which increases the likelihood of prices falling below 146.65.
Summary
The current USDJPY outlook reflects the persistent risk of a breakout below the 146.05 support level and the development of a bearish trend under pressure from expectations of a Fed rate cut and potential Bank of Japan tightening. USDJPY technical analysis further confirms the downside scenario, indicating a high probability of a breakout below the Triangle pattern’s lower boundary with a target at 145.95.
Source: Roboforex