USD/JPY forecast: Third-party price target
The US dollar to Japanese yen (USD/JPY) rate is down approximately 9.41% year-to-date after the yen closed at 142.8790 per dollar on 25 April 2025 – marking one of JPY’s strongest levels versus USD since September 2024, and around 11.77% below its July 2024 high of 161.942.
The Bank of Japan (BoJ) raised its benchmark interest rate to 0.5% in January 2025, marking a departure from its ultra-loose monetary policy as inflation consistently exceeded its target. This adjustment has narrowed the interest rate differential with the Federal Reserve, which currently holds a target range of 4.25%-4.50%. The smaller yield gap has reduced upward pressure on the dollar, supporting a firmer yen.
How might the USD/JPY rate react to ongoing geopolitical tensions, heightened by US trade tariffs, and evolving interest rate differentials? Here are the latest third-party USD to JPY predictions, with analysts’ insights and forecasts for 2025 and beyond.
USD/JPY forecast for 2025 and beyond
On 25 April 2025, a team of analysts led by Chris Turner, global head of markets at ING Bank, shared their views on individual forex currencies – including the USD/JPY rate.
‘We have mentioned the risk that trade talks could lead to some new (dollar bearish) currency arrangements consistent with the idea of a Mar-a-lago accord… USD/JPY has probably fallen quite enough for Washington for the time being and US policymakers prefer some dollar stability and a recovery in equity markets as opposed to another blast of volatility that a new currency accord could unleash.’
As of 16 April 2025, ING’s latest forecast targeted an average of 158 yen per US dollar in the second quarter of 2025, where it hovers for the remainder of 2025. ING’s USD/JPY prediction declines to 155 in the first quarter of 2026, rising to 157 in Q2 and Q3, and 159 in Q4.
Meanwhile, on 28 April 2025, Trading Economics targeted a moderately bullish 143.6740 USD/JPY rate for the end of this quarter, and 151.42 by April 2026. The website highlighted how: ‘The Japanese yen slipped toward 144 per dollar on Monday, extending last week’s losses as the dollar strengthened amid easing global trade tensions.’
Scotiabank bearishly suggested on 25 April 2025 that USD/JPY rate volatility would increase, predicting an average 135 Japanese yen per US dollar in 2025, down to 125 in 2026.
USD/JPY rate: Long term predictions
Algorithmically-generated, longer-term USD/JPY predictions as of 28 April 2025 reflect a mixed sentiment, reflecting persistent inflation and broader market volatility.
On the bullish side, algorithmic predictions service Wallet Investor targeted a 151.741 USD/JPY rate at the end of December 2025, rising to 163.976 to close 2026. The forecaster indicated a 176.227 yen per dollar in 2027 and 188.521 in 2028 – reaching as high as 204.893 by April 2030.
Gov Capital, another algorithmic forecasting tool, also predicted USD/JPY’s rate to grow over the next five years, averaging 145.086 on 31 December 2025 and 163.251 the following year, suggesting that USD/JPY could trade around 219.971 by April 2030.
However, Coin Codex took a bearish stance with its USD/JPY forecast, projecting an average 134.53 rate in 2025 and 122.27 in 2026, potentially falling to 108.58 JPY per USD in 2030.
Past performance doesn’t guarantee future results. Forecasts and predictions can be inaccurate or wrong, and they can’t account for unpredictable market-moving events, such as evolving macroeconomic and geopolitical conditions.
USD/JPY technical analysis
As of 28 April 2025, USD/JPY is down 7.97% year on year and 9.41% year-to-date, based on its last closing price, which was 142.879 on 25 April 2025.
Technical analysis from Trading View aggregated a ‘sell’ signal from 26 one-month indicators comprising 11 oscillators and 15 moving averages – including Hull moving average and relative strength index. Overall, 15 indicated a ‘sell’ and two a ‘buy’, while the remaining 9 were neutral.
Tip Ranks applied 20 one-month indicators to USD/JPY’s rates, resulting in a consensus ‘neutral’ signal. Eight were bearish, five were neutral, and the other seven were bullish.
On the other hand, Wells Fargo – in its International Economic Outlook: March 2025 – summarised its own technical findings on USD/JPY, concluding that ‘With respect to select G10 currencies, we expect the Japanese yen to be among the outperformers versus the U.S. dollar in 2025. Steady Japanese economic growth, evidence of ongoing wage growth (Figure 6), and inflation that remains above the central bank's target support our view of further Bank of Japan (BoJ) rate hikes.’
Wells Fargo projected steady growth and suggested that USD/JPY could trade at an average 148 rate in Q4 2025, climbing to 151 by Q3 2026.
What influences the USD/JPY exchange rate?
The USD/JPY rate is influenced by a combination of monetary policy, trade dynamics, investor flows, and macroeconomic data. Each factor can strengthen or weaken the pair depending on market conditions.
Interest rate differentials
A higher US interest rate can strengthen the dollar, as global investors seek yield in US assets. Conversely, when the gap between US and Japanese rates narrows, capital may shift back to yen-denominated investments, supporting the yen. These movements are driven by expectations for central bank policy, and are often reflected in bond yields and short-term carry trade flows.
Trade policy and tariffs
Trade tensions involving Japan can produce mixed effects on the yen. While tariffs may pose a threat to Japanese exports, the yen often strengthens as investors seek safe-haven assets amid uncertainty. For example, during past periods of US-Japan trade friction, the yen has seen gains despite pressure on the export sector, creating two-way volatility in the exchange rate.
Central bank action
Hawkish messaging from the Fed may support the dollar, while dovish language weakens it. Similarly, the BoJ’s policy shifts can strengthen or weaken the yen. In extreme cases, Japanese authorities may intervene directly in currency markets – typically when rapid depreciation or excessive appreciation of the yen occurs – introducing additional short-term USD/JPY rate volatility.
Market sentiment
The Japanese yen is widely considered a safe-haven currency, historically preferred during global risk-off periods due to Japan’s current account surplus. When geopolitical tensions rise or equity markets fall, demand for the yen may increase, potentially weighing on USD/JPY. In contrast, during stable or bullish market conditions, risk appetite improves, supporting the dollar and lifting the pair. These flows are closely tied to volatility indices and risk perception.
Macroeconomic data releases
Key data points from both economies influence USD/JPY’s rate through shifting expectations for monetary policy. Strong US inflation, GDP, or employment data can lift the dollar, while weak results may lead to rate cut expectations. On the Japanese side, wage growth and inflation figures can provide BoJ policy signals. Markets often react quickly to surprises in high-impact data releases, including US CPI figures alongside nonfarm payrolls and Japan’s GDP or Tankan business sentiment survey.
Trade USD/JPY via CFDs on Capital.com – Learn more in our CFD trading guide.
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Historical USD/JPY performance
The USD/JPY pair transitioned from a fixed exchange rate under the Bretton Woods system to a floating rate in 1973. At the time, the yen was pegged at 360 per dollar. Following the collapse of Bretton Woods, the yen appreciated rapidly due to Japan's burgeoning trade surplus and strong economic growth.
The introduction of ‘Abenomics’ in late 2012 marked a turning point for USD/JPY. Former Prime Minister Shinzo Abe implemented aggressive monetary easing through the Bank of Japan (BoJ), weakening the yen to stimulate economic growth. Japan’s ultra-loose monetary policy contrasted with the Federal Reserve’s tightening cycle. USD/JPY closed at 85.9600 on 31 December 2012 – up approximately 10.68% from the start of the year.
By late 2022, the pair reached a multi-decade high of 151.94 due to widening interest rate differentials between the Federal Reserve and BoJ. In 2023, the Federal Reserve continued its tightening cycle early in the year. However, by the end of the year, signs of a potential slowdown in U.S. interest rate hikes and speculation about BoJ policy adjustments led to a decline, with USD/JPY closing at approximately 141.43 on 29 December 2023.
As of April 2025, USD/JPY stands at approximately 142.879, down from its July 2024 peak of 161.942 but still elevated compared to historical averages. The BoJ’s recent shift toward tightening monetary policy has strengthened the yen, narrowing its gap with US interest rates. Despite ongoing US-Japan trade talks, geopolitical tensions and evolving trade dynamics continue to influence safe-haven flows into yen-denominated assets.
Past performance isn’t a reliable indicator of future results
USD/JPY forex trading strategies
Currency pairs, including USD/JPY, are traded almost 24 hours a day, five days per week, as forex market trading hours follow a rolling schedule across major financial centres. As a result, rates could move in favour or against your positions around the clock. Strategies can help traders maintain focus, avoid distractions, and control emotions in trading.
- Swing trading strategies are medium-term. Swing traders aim to capture gains over several days or weeks during the course of a price swing.
- Position trading strategies can take months or even years. Position traders focus on sustained trends, rather than short-term movements.
- Trend trading strategies may involve technical indicators to assess a movement’s direction and strength. Trend traders aim to capture gains within a prevailing trend.
- Day trading strategies have shorter time-frames, often taking place over a day. Day traders aim to capitalise from intraday price fluctuations.
Discover more trading strategies on our dedicated trading strategies page.
Risks and rewards to USD/JPY forex trading
Be aware of the risks and potential rewards of USD/JPY, and account for them in your trading strategy. Here are some key factors to consider:
- Market conditions: USD/JPY is influenced by interest rate differentials, inflation expectations, and global risk sentiment. Shifts in Bank of Japan (BoJ) or U.S. Federal Reserve policy can trigger sharp moves in either direction.
- Volatility risk: while generally stable, the pair can become volatile during major data releases or geopolitical developments. Sudden intervention by Japanese authorities is also a possibility, particularly if yen strength or weakness becomes excessive.
- Trading hours: liquidity is often higher during Asian and US trading hours. Traders should be aware of session overlaps and timing of key economic announcements, such as US nonfarm payrolls or Japan’s inflation data.
- Safe-haven dynamics: the Japanese yen is widely regarded as a safe-haven currency. In risk-off environments, demand for the yen may rise, pushing USD/JPY lower. The dollar can also attract flows during periods of global uncertainty, but this varies by context.
- Execution and regulation: trading through a regulated broker provides protections such as negative balance protection, client fund segregation, and reliable execution – to ensure a secure trading environment.
- Risk management: these tools help fortify trading positions against adverse movements, though their effectiveness depends on market conditions. Learn more on our risk management page.
Learn more in our forex trading guide.