Japanese Yen Technical Analysis: USD/JPY, EUR/JPY, GBP/JPY
Original article by James Stanley at Forex.com
Date: August 18, 2025
Rewritten and expanded analysis
The Japanese Yen has seen significant moves across several key currency pairs over recent trading sessions, primarily against the US Dollar, Euro, and British Pound. These moves come amid a backdrop of shifting monetary policy expectations, diverging interest rates, and evolving risk sentiment in global markets. This technical analysis will focus on three important yen pairs: USD/JPY, EUR/JPY, and GBP/JPY.
Key Themes Impacting the Yen
The Japanese Yen’s behavior is influenced by a combination of technical and fundamental factors. Some of the major drivers impacting recent yen weakness or strength include:
– Divergent monetary policy between the Bank of Japan (BoJ) and major central banks such as the Federal Reserve, European Central Bank, and Bank of England
– Inflation trends in Japan compared to peer economies
– Shifts in bond yields, particularly US 10-year Treasury yields which strongly correlate with USD/JPY
– Safe-haven flows, especially during periods of heightened geopolitical or financial volatility
– Positioning and market sentiment around carry trades involving the yen
As of mid-August 2025, yields in the US and Europe remain elevated compared to Japan, where the BoJ has been extremely gradual in its normalization process despite mild tightening. This has reinforced yen weakness across the board.
USD/JPY Technical Outlook
One of the clearest representations of yen movement is in the performance of USD/JPY, which has been in a long-term uptrend that began around early 2021. As of August 2025, that trend remains intact, with occasional corrective pullbacks providing potential entry points for bulls.
Key Technical Features:
– Long-term uptrend remains valid as long as price remains above key support levels
– Resistance near the psychological 150.00 level continues to be a major barrier. Multiple attempts in prior months pushed toward that region but failed to deliver a sustained break
– Recent consolidation has formed a symmetrical triangle pattern, suggesting coiled momentum
Key Levels to Watch on USD/JPY:
– Support:
– 144.50: This serves as a lower boundary of the recent triangle pattern and also aligns with prior swing lows
– 142.50: Previous resistance-turned-support and a key area for buyers to defend
– Resistance:
– 148.50: A ceiling seen multiple times through Q2 and Q3 of 2025
– 150.00: Major psychological level; attempts to break this have often resulted in sharp reversals
Trading Strategy:
– Bullish bias remains as long as the uptrend line from January holds
– Await breakout from the triangle consolidation pattern for directional cues
– A confirmed breakout above 148.50 could open the door for a retest of the 150.00 level
– A downside break below 144.50 could suggest rising bearish pressure with further declines toward 142.50 possible
Additional considerations include keeping an eye on US economic data that affects rate hike expectations, such as Non-Farm Payrolls, CPI, and Fed commentary. Higher inflation or stronger US data typically translates into higher USD/JPY.
EUR/JPY Technical Analysis
The EUR/JPY pair has also seen a powerful uptrend throughout 2025, fueled by rate differentials and improving Eurozone economic performance. The recent rally has moved well beyond pre-pandemic levels and is beginning to probe long-term resistance from a multi-decade perspective.
Key Observations:
– EUR/JPY has rallied over 1000 pips since early 2025
– Price is trading near a key long-term resistance zone around 160.00, last tested in 2008
– While no significant reversal has yet materialized, momentum is beginning to show early signs of divergence
Key Technical Levels:
– Support:
–
Explore this further here: USD/JPY trading.