USD/JPY Weekly Outlook

Traders searching for clues in Moody’s downgrade may find little from past episodes. But in a market questioning U.S. credibility, USD/JPY could start to reflect that doubt.

Markets are placing bets on both economic data and diplomacy this week. USD/JPY strength has returned, but it now hinges on trade talks showing progress and U.S. data avoiding another soft patch. A misstep on either front could flip momentum quickly.

USD/JPY is trading more like a risk proxy than a haven, tracking bitcoin and equities while ignoring Fed signals. With Powell likely to say little, watch U.S. data and sentiment for the next move.

Risk sentiment has taken the driver’s seat for USD/JPY, but this week’s barrage of top-tier U.S. data and BOJ guidance may hand the reins back to fundamentals.

USD/JPY continues to shrug off traditional drivers like yield spreads and Fed pricing, aligning more closely with classic safe havens like gold and Swiss franc. Unless that dynamic breaks, trade headlines and Treasury auctions may prove more influential than central bank speech or second-tier data releases in the week ahead.

Yield differentials no longer matter for USD/JPY as haven demand takes over. With political risk front and centre, traders may keep sidelining data and rates commentary for now.

After a whiplash reversal to end last week, all eyes turn to Monday’s open in Asia. Was it hedging? Or was it the start of something bigger?

Japanese yen traders face a volatile week with quarter-end flows, trade uncertainty, and major U.S. data releases. USD/JPY’s link to interest rates has weakened, but that could change post-March 31. A decisive move may come as the U.S. unveils new tariffs on April 2 as risks build on the downside.

USD/JPY is pressing against resistance as Japan’s fiscal year-end adds to quarter-end volatility risks. With interest rate differentials playing a reduced role, the yen’s fate may rest on risk sentiment and price action in equities.

Risk appetite is calling the shots for USD/JPY, but with Fed and BOJ decisions looming, the game could change fast.

Interest rate differentials have long been a key USD/JPY driver, but risk sentiment is now playing a bigger role. With U.S. economic data softening and stocks wobbling, the pair faces a crucial test ahead of the CPI report. Will risk-off flows keep USD/JPY under pressure, or is a countertrend rally overdue?