Buyers may retake initiative in USDJPY with target of 146.00

The USDJPY pair is trading just below one-week highs on Thursday amid continued uncertainty in trade relations between the US and China, as well as expectations of a trade agreement between Tokyo and Washington soon.

The yen is gaining support amid prospects of policy tightening by the Bank of Japan in 2025. Inflation in the country is consistently above the target level of 2%, increasing the likelihood of further rate hikes by the regulator.

Some support for the dollar comes from statements by officials. US Treasury Secretary Scott Bessent emphasized the need to reduce excessive duties between the US and China before the start of negotiations. At the same time, President Donald Trump ruled out the possibility of a unilateral reduction of tariffs, which restrained the growth of optimism in the markets.

Tokyo has issued warnings to Washington. As Bank of Japan head Kazuo Ueda said, given the negative impact of tariffs on the economy, there could be a response. The Japanese central bank's updated forecasts also point to a possible slowdown in growth due to external risks.

On the other hand, market participants are anticipating a cycle of rate cuts by the Federal Reserve as early as June. This limits the potential of the dollar, despite its recent growth due to reduced concerns about the independence of the central bank.

Today, investors' attention is focused on US statistics: data on unemployment claims, durable goods orders, and sales in the secondary housing market. These publications may affect the short-term dynamics of USDJPY.

From a technical point of view, on the H4 timeframe, the pair retains the structure of the descending channel. However, on H1, the formation of the third ascending wave is observed. After breaking the top of the first wave near 143.22, the price entered a consolidation phase. Further consolidation is possible when the upper boundary of the descending channel is broken. The Stochastic Oscillator indicator (default parameters) is close to the oversold zone, increasing the probability of a new upward impulse.

Signal:

Short-term prospects for USDJPY suggest buying. 

The target is at the level of 146.00.

Part of the profit should be taken near the level of 143.75.

A stop-loss could be placed at the level of 141.00.

The bullish scenario is short-term, so trade volume should not exceed 2% of your balance.