USD/JPY forecast June 2025: USD/JPY TESTS CHANNEL RESISTANCE AS MARKET WEIGHS BOJ CAUTION AND FED PATH

USD/JPY forecast June 2025: USD/JPY TESTS CHANNEL RESISTANCE AS MARKET WEIGHS BOJ CAUTION AND FED PATH

In the wake of the escalating geopolitical tension in the Middle East, markets have been reacting sharply. Focusing on USD/JPY currency pair forecast, as the conflict shows signs of intensifying, investors turned to traditional safe-haven assets notably the amid fears of a broader regional spillover.

BOJ and Fed Policy Meetings in Focus Amid Economic Uncertainty

Beyond geopolitical tension in the Middle East, both economies are set to announce their interest rate decisions this week alongside economic outlook. At the end of Bank of Japan two days policy meeting earlier today, the Yen became a little stronger after the Bank of Japan said that it would keep interest rates at 0.5% and that it would slow down the process of reducing its balance sheet in 2025. BOJ Governor Kazuo Ueda maintained a cautious tone, noting global risks and keeping the door open for further policy tightening if needed.

On the other hand, the U.S., the retail sale would be on the wire by 4:30 PM GMT+4 (Dubai time). This key economic indicator will offer details about consumer spending trends, a major driver of the U.S. economy. Markets will closely watch the data for signs of economic strength or weakness, as it could influence expectations around future Federal Reserve policy decisions.
While the most important on the calendar, is that Fed committee is due to convene today for a two-day policy meeting, which would end on Wednesday the 18th.Meanwhile, Markets has priced in 99.9% for the rate unchanged at 4.25-4.50%.

BOJ June 2025 Policy Summary and its impact on USD/JPY

As expected, the Bank of Japan (BOJ) ended its policy meeting in June 2025 by keeping its benchmark interest rate at 0.5%. The central bank said again that it was cautious and stressed the need for stability in the face of global uncertainties and a weak recovery at home. 
The BOJ made an important announcement that it would slow down the rate at which it reduces its balance sheet starting in 2025. This means that ultra-loose monetary conditions will end more slowly. “We are closely monitoring both domestic and international developments and will adjust our policy as needed to ensure sustainable inflation and financial stability” according to Kazuo Ueda.
The BOJ’s dovish tone as seen today alongside its monetary policy stance would likely limit the Yen strength in the near term and as such the bullish momentum seen on USDJPY would likely continue as per analyst, especially as the Fed maintains a higher rate differential.
While geopolitical tensions and safe-haven flows could support the yen, the USD/JPY is expected to stay biased to the upside, particularly if U.S. economic data continues to outperform. Analysts now see USD/JPY trading between 144.00–146.50 in June, with upside potential if the Fed reinforces a hawkish stance.
 

Technical view of USDJPY for June 2025; and price levels to watch out

Away from the fundamental drivers, the USD/JPY pair initially dropped on Friday the 13th and was resisted around 142.79 as risk aversion drove demand for the yen. However, the move was tempered by ongoing strength in the U.S. dollar, underpinned by resilient U.S. economic data and expectations the Federal Reserve may keep interest rates higher for longer, hence the change of character (CHOCH) at 143.89, hence the reversal of trend from downtrend to uptrend on the one-hour time frame, whereby price is seen trading inside the channel with the green trendline acting as support and the red, resistance. The pair was recently supported at 144.40 and hovers around 145.
In view of the economic releases, a break above 145.00 would likely usher in 145.40 and 145.80, while a break below 144.40 would mean that the bears are momentarily in control and price would potentially tank further towards 144.00 and 143.50 according to analyst, meanwhile break out of these levels are not ruled out.

Fig 1 USDJPY 1H tradingview