Selling USDJPY due to new US economic forecasts

The USDJPY currency pair was at 148.783 at the opening of trading on Thursday, March 20, following Wednesday's interest rate decisions in the United States and Japan.

The Federal Reserve (Fed) kept its key interest rate in the range of 4.25–4.5%. Fears of slowing economic growth and persistently high inflation have led to this decision. The Fed plans to cut rates twice this year by 0.25 percentage points each time.

Fed Chairman Jerome Powell said that the tariffs' impact on inflation will be temporary, but emphasised that it is still difficult to give precise forecasts. The new expectations suggest a slowdown in US economic growth and a rise in unemployment.

Expectations of rate cuts and economic slowdown will put USD under pressure in the medium term, although it may strengthen in the short term due to still relatively high rates.

The Bank of Japan kept interest rates at 0.5%, as it was expected. The BOJ Board decided to spend more time assessing the possible impact of US import duties on the export-oriented economy of Japan. As a result, the JPY dropped against other currencies.

On March 20, Japan's inflation data is expected to be released. According to forecasts, the national Consumer Price Index (CPI) is projected to reach 4.2% year-on-year in February.

The MACD chart for March 20 shows a potential for growth. The indicator remains in the negative zone, signalling the persistence of bearish sentiment, but the dynamics of both the main and signal lines suggests that the situation is improving. The histogram confirms the improvement of sentiment, hinting at a possible reversal or correction.

The Stochastic Oscillator chart for March 20 is neutral. Both lines are in the middle zone, which indicates that there are no clear signs of overbought or oversold conditions. However, the current dynamics of the lines suggests the persistence of bearish sentiment and a possible downward movement.

Current recommendation:

Sell at the current price. Take profit — 146.5. Stop loss — 150.