Japanese economy slows down, but USDJPY may continue to climb

USDJPY is pulling back, but the bullish impulse remains, suggesting a possible continuation of growth once the current correction ends. Discover more in our analysis for 9 June 2025.

USDJPY forecast: key trading points

• Japan’s GDP remained flat in Q1 2025
• Japan’s Services PMI rose to 44.4 in May 2025
• USDJPY forecast for 9 June 2025: 146.25

Fundamental analysis

USDJPY declines following two sessions of gains, while the US dollar bounces off key resistance at 145.05. Despite the ongoing risk of forming a Double Bottom reversal pattern, bulls still need to show stronger momentum to confirm this scenario.

Pressure on the yen intensified after GDP data showed Japan’s economy remained flat in Q1 2025 — better than the initial estimate of a 0.2% contraction, yet well below the 0.6% growth recorded in Q4 2024.

Meanwhile, Japan’s Services PMI rose to 44.4 in May 2025. Despite the uptick, the index remains well below the level indicating sustained recovery. May marks the fifth consecutive month of overall decline, with falling household budget sentiment — particularly in the food and beverages segment — contributing to reduced activity.

USDJPY technical analysis

USDJPY is correcting after breaking above the upper boundary of a Triangle pattern. Today's forecast expects a rebound from the lower boundary of the bullish channel, with a potential rise toward 146.25. The Stochastic Oscillator supports a bullish scenario — having exited the overbought zone and now approaching the 20 level. A confirmed breakout above the upper boundary of the ascending channel and price consolidation above 145.50 would strengthen the case for further upside.

Summary

GDP and services data point to ongoing economic challenges in Japan, keeping pressure on the yen. USDJPY technical analysis suggests the pair may resume its uptrend after a correction, targeting 146.25 in the near term.