forexeatrading 
- Trump’s 25% auto tariff plan places stress on Japan’s exports.
- USD/JPY at 151.00, a key pivot after breaking development resistance.
- The rising wedge hints at a possible draw back if the bulls fail to carry features.
- Friday’s U.S. and Japan inflation knowledge add to market volatility dangers.
The Trump administration appears to be like set to introduce a 25% tariff on auto imports getting into the US on April 2, alongside separate yet-to-be-announced reciprocal tariffs on all nations scheduled for a similar day. That places Japan within the crosshairs of the commerce battle, provided that the US is one in all its largest export markets. The information has seen USD/JPY push again towards 151.00, a key battleground for bulls and bears following the break of longstanding downtrend resistance earlier this week.
Tariff Turmoil Hits Japan
Trump’s deliberate 25% tariff on auto imports threatens to hit Japan notably onerous, with the U.S. accounting for round $41 billion price of Japanese auto exports in 2024. Larger prices for American patrons may crimp demand, denting revenues for Toyota (NYSE:TM), Honda (NYSE:HMC), and Nissan whereas forcing robust selections on manufacturing and pricing. The state of affairs may worsen additional if Japan retaliates with tariffs on U.S. imports, additional impacting provide chains for its giant manufacturing sector.
Japan’s financial restoration from a long time of deflation stays fragile, and any slowdown in commerce with the U.S. presents one other problem for policymakers on the Financial institution of Japan. That raises the danger the BOJ might battle to carry interest rates additional this 12 months.
151: The New USD/JPY Battleground
Whereas USD/JPY pushed greater on the tariff headlines, the response deviated from the current development the place damaging information sometimes noticed the yen behave as a protected haven. Over the previous month, USD/JPY has proven a stronger relationship with threat property and volatility measures than with rate of interest differentials, suggesting that an escalation within the commerce battle may weigh on the pair.
USD/JPY is now locked in a battle at 151.00 following the bullish break of long-standing downtrend resistance earlier this week. The extent has beforehand acted as each assist and resistance, making it a key pivot for broader directional dangers. Stepping again, the value seems to be carving out a rising wedge after bottoming in early March, warning that the nascent restoration might quickly give approach to a resumption of the broader bearish development.
Supply: TradingView
If USD/JPY fails to interrupt convincingly above 151.00, it could encourage bears to determine shorts searching for a transfer decrease. A cease could possibly be positioned above the extent for cover. Uptrend assist sits round 149.30 right this moment, with a break of that opening the door for a possible take a look at of 148.65 and even 147.10. Conversely, a sustained break above 151.00 may function a launchpad for bulls searching for a push in direction of the 50 and 200-day transferring averages.
Momentum indicators are sending blended alerts. Whereas RSI (14) is trending greater, this week’s slight bearish divergence hints at fading upside momentum. MACD is grinding greater however stays in damaging territory. Taken collectively, momentum screens are impartial, inserting better emphasis on worth motion when assessing setups.
Though they’re more likely to play second fiddle to the April 2 tariff announcement, Friday looms as an necessary session for USD/JPY merchants with key inflation knowledge launched in each Japan and the U.S. I previewed each occasions in my weekend outlook.
