USD/JPY: Analysis and Forecast

During the Asian session today, following the release of the CPI (Consumer Price Index) data from Tokyo, the Japanese yen attempted to regain its recent gains against the U.S. dollar. The rise in inflation in Tokyo strengthens the Bank of Japan's aggressive monetary policy stance, which supports the yen and pressures the USD/JPY pair downward. However, during the European session, the dollar began to reclaim its strength.

The downward potential for the USD/JPY pair is limited as the U.S. dollar, following yesterday's stronger-than-expected economic data, is trying to maintain its recent gains. However, dovish comments from the Federal Reserve could restrain the further growth of the U.S. dollar.

Today, traders should focus on the U.S. PCE (Personal Consumption Expenditures) index for insights into the future direction of U.S. interest rates and potential trading opportunities.

From a technical standpoint, the pair is above the downward trendline, indicating a weakening of the bearish bias. However, the RSI (14-day Relative Strength Index) remains above 30, confirming the bearish trend.

Additionally, the USD/JPY pair may test the downward trendline at the 144.50 level.

A break below this level could see the pair move toward the seven-month low recorded on August 5, with further support at 140.25.

Regarding resistance, if the pair consolidates above the 145.00 level, it could open the path to 146.00, and a move into the 146.500 supply zone could increase the likelihood of a bullish trend.