USD/JPY Analysis Today 08/05: Best Buying Strategy (Chart)

(MENAFN- Daily Forex)

• According to Forex market trading, we observed a decline in the Japanese Yen against other major currencies, ending a three-day upward wave.
• This was driven by news of upcoming US-China trade talks in Switzerland, which eased investor concerns and reduced demand for safe-haven assets.
• Sentiment across Asia was boosted by the People's Bank of China's announcement of an interest rate cut aimed at stimulating economic growth.
• The USD/JPY pair gained positive momentum, stabilizing around the resistance level of 144.46 at the time of writing this analysis and before the US event. Through our free trading recommendations page, we recommended buying from the support level of 142.50.

Forex traders also closely monitored the progress in US-Japan trade negotiations, with Tokyo striving to reach a bilateral agreement by June. On the economic front, Japan's April Services PMI was revised upwards, highlighting the strongest increase in new orders in nearly a year. Meanwhile, the Bank of Japan last week kept its benchmark interest rate at 0.5% and lowered its growth and inflation forecasts, indicating that any future interest rate hikes remain unlikely for the time being.

According to currency market trading, the latest developments between China and the United States represent the latest progress in easing global trade tensions, welcomed by global investors who hope these measures will boost economic growth. The Japanese yen, a safe-haven currency, benefited from the escalation of trade tensions following Donald Trump's announcement of tariffs on "Liberation Day" on April 2, which proved to be more severe than expected.

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We still recommend buying the dollar against the Japanese yen at every downward trend without risk and monitoring the factors affecting the currency pair US Federal Reserve Keeps Interest Rates Unchanged

As expected, the US Federal Reserve kept its federal funds rate target range unchanged at 4.25%-4.50% for its third consecutive meeting in May 2025, in line with expectations. Officials are adopting a wait-and-see approach amid concerns that President Trump's tariffs could lead to higher inflation and slower economic growth. At the same time, policymakers noted increasing uncertainty about the economic outlook and rising risks of higher unemployment and inflation. The US central bank also reported that despite the impact of fluctuations in net exports on the data, recent indicators suggest that economic activity continues to expand at a solid pace. The country's unemployment rate has stabilized at a low level in recent months, and labor market conditions have remained steady. Inflation remains somewhat elevated.

EURUSD Chart by TradingViewUSD/JPY Technical Analysis and Expectations Today:

According to the performance on the daily timeframe chart, the USD/JPY currency pair is still in the early stages of forming an upward channel and currently lacks sufficient momentum to confirm the upward shift. This could occur if the bulls succeed in breaking towards the resistance levels of 145.60 and 147.00, respectively. The MACD indicator for the 12.26 closing suggests an upward shift but has not yet reached the overbought zone, giving the bulls opportunities for an upward rebound. At the same time, the Relative Strength Index (RSI) remains below the midline, confirming that the bulls need more stimulus before confirming the bullish shift.

On the negative side, the bullish outlook for the USD/JPY will be affected by the bears moving the currency pair towards the support level of 142.30 and lower. So far, we still prefer the strategy of buying the US dollar against the Japanese Yen from every downward level.

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