USD/JPY Monthly Forecast: June 2025

• The US dollar has been very noisy against the Japanese yen during the month of May, and I think you will see more of the same.
• However, we are perhaps in the midst of trying to stabilize things, and I do think that I am starting to see an overall attitude shift when it comes to the US dollar.
• Recently, we have seen some hints that perhaps the United States dollar is starting to go back into favor, and quite frankly the US dollar has been oversold for a while.

June Could Be Interesting

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While the summertime is typically very choppy for currencies, and other markets, it’s also possible that we could see a little bit of interesting momentum. This is a market that looks like it is going to pay close attention to the ¥142 level, because it has offered support multiple times. I also believe that there is a significant amount of support underneath near the ¥140 level as well, where we have the 200 Week EMA. Anything below there would be absolutely catastrophic for the US dollar, and we would probably see the US dollar shrink against most currencies. However, again, I think that the US dollar is oversold.

Interest rate differential continues to favor the US dollar against the Japanese yen, and late in the month of May we have seen a complete lack of bids for the Japanese Government Bond market in the 10 year. What I say a lack of bids, I mean there were literally zero bids for a couple of sessions. When this happens, typically the Bank of Japan will jump in and start buying bonds themselves. This is quantitative easing, and this is exactly what will send most currencies hires against the Japanese yen. Ultimately, I do think that the US dollar rises against the Japanese yen, but I don’t think it will be the cleanest of moves. I believe that we probably stay somewhat within the range that we have been in over the last couple of months, but I would expect that we will get a pop sometime during the month.

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