USD/JPY Anticipated to Trade Within the Range of 149.20-150.55: Insights from UOB Group (February 21, 2025)

USD-JPY Exchange Rate: A Closer Look

The US Dollar (USD) is anticipated to trade within a narrow range against the Japanese Yen (JPY) in the near term, according to UOB Group’s FX analysts Quek Ser Leang and Peter Chia. The predicted range is 149.20/150.55.

Short-Term Outlook

The USD-JPY pair has been experiencing volatility in recent weeks due to several factors, including geopolitical tensions and economic data releases from both countries. However, the analysts at UOB Group believe that the pair will remain range-bound in the short term.

According to their analysis, the USD is likely to face downward pressure in the longer run due to several factors. These include the Federal Reserve’s (Fed) monetary policy, which is expected to remain accommodative, and the ongoing economic recovery in the US. The analysts also note that the significant support at 148.63 may not come into view so soon.

Long-Term Trend

The long-term trend for the USD-JPY pair is anticipated to be bearish, according to various market analysts. The Fed’s monetary policy, which is expected to remain accommodative for an extended period, is one of the primary reasons for this trend. The Fed’s easy money policy makes the US dollar less attractive to investors, which can lead to a decline in its value.

Furthermore, the Japanese economy is showing signs of recovery, which can lead to a stronger JPY. The Bank of Japan (BoJ) has also adopted a more dovish stance, which can limit the upside potential for the JPY. However, any significant economic data releases from Japan or the US could cause the pair to deviate from its current trend.

Impact on Individuals

For individuals holding USD-denominated assets or planning to travel to the US, a declining USD could lead to higher costs. For instance, those planning to travel to the US may find that their local currency buys fewer US dollars than before. Similarly, those holding USD-denominated assets may see a decline in their value.

Impact on the World

A declining USD can have several implications for the global economy. For instance, it can lead to increased demand for commodities, as they become cheaper for buyers holding non-USD currencies. This can lead to higher commodity prices, which can have a ripple effect on inflation and economic growth.

Furthermore, a declining USD can lead to increased demand for the JPY and other safe-haven currencies, such as the Swiss Franc and the US Dollar. This can lead to a decrease in the value of riskier assets, such as stocks and corporate bonds.

Conclusion

In conclusion, the US Dollar is expected to trade within a narrow range against the Japanese Yen in the near term, with a bearish outlook for the longer term. This trend could have significant implications for individuals holding USD-denominated assets and for the global economy as a whole. It is essential to keep an eye on economic data releases and geopolitical developments that could impact the USD-JPY pair and the broader currency market.

  • USD-JPY pair is expected to trade within a narrow range of 149.20/150.55
  • Long-term trend for USD-JPY pair is bearish
  • Declining USD could lead to higher costs for individuals holding USD-denominated assets
  • Declining USD can lead to increased demand for commodities and safe-haven currencies

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