USD/JPY Faces Downward Pressure, Likely to Consolidate in 142.10-143.45 Range

May 26, 2025, Singapore— The U.S. dollar (USD) weakened against the Japanese yen (JPY), dropping to 142.41 on May 23, 2025, as reported by market analysts. Despite this decline, the USD/JPY pair is expected to stabilize within a lower range of 142.10 to 143.45 in the near term, according to UOB Group’s FX analysts. With global trade tensions and a softening dollar influencing markets, the pair’s movements are critical for traders and investors. The longer-term outlook remains bearish, with a key support level at 141.70 under watch, signaling potential further declines or a consolidation phase.

Short-Term Outlook: Consolidation Expected

On May 23, 2025, the USD/JPY pair fell to 142.41, defying expectations of consolidation between 143.40 and 144.70. Analysts note that downward momentum has not significantly intensified, suggesting the pair may hover within a 142.10-143.45 range in the immediate 24-hour period. A clear break below 142.10 is unlikely in the short term, per UOB Group’s assessment. Recent market data indicates the yen’s strength is bolstered by Japan’s stable monetary policies and a global dollar sell-off, driven by U.S. trade disputes, as observed in forex updates from May 25, 2025.

Did You Know?
The Japanese yen, one of the world’s top safe-haven currencies, has been a global reserve currency since the 1980s, per Bank of Japan historical data.

Longer-Term Risks and Key Levels

Looking ahead one to three weeks, the USD/JPY pair retains a bearish bias, though its rapid decline to 142.41 caught analysts off guard. Last week, the pair’s low near 142.80 acted as strong support, but the focus now shifts to 141.70 as a critical level to monitor. A breach of 144.00, previously a strong resistance at 145.05, would signal stabilization and a potential broader consolidation phase.

The dollar’s weakness aligns with broader market trends, including a 0.6% drop against regional currencies like the Malaysian ringgit, as noted in recent financial reports. Japan’s safe-haven yen status continues to attract investors amid global uncertainties.

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Market Context and Economic Drivers

The USD/JPY’s decline reflects broader dollar weakness, exacerbated by U.S. tariff policies impacting trade with Europe and Asia. Social media discussions highlight the yen’s appeal as a safe-haven currency, with Japan’s steady interest rate environment contrasting U.S. volatility. The Bank of Japan’s cautious stance on rate hikes, reported in May 2025, supports the yen’s resilience. Traders are closely watching U.S. economic data and Federal Reserve signals, which could influence whether the USD/JPY breaks below 141.70 or stabilizes, shaping forex strategies for the coming weeks.