USD/JPY Outlook

USD/JPY Trading Outlook and Random Musings from the Savvy Trader

USD/JPY Forecast: Watching the 141 Support Level

When it comes to USDS/JPY, the last meaningful level of support I see—purely from a technical chart perspective—is 141. Am I saying this because I know something the market doesn’t? Not really. I’m just looking at the chart and calling it how I see it.

If this support level breaks, the next significant zone I’m eyeing is between 133–128. And if that unfolds, my long-term USD/JPY projection stretches toward the 176 / 185 / 201 / 224 range.

Yes, I know that sounds aggressive. But stranger things have happened in currency markets.

USDJPY  MONTHLY CHART (added by global-view with permission)

Musings on Inflation, Manufacturing, and Market Psychology

Now, let’s step back and take a wider look—not just at USD/JPY, but what its movement might represent.

If USD/JPY does climb toward those higher targets, then it becomes a classic case of the U.S. exporting inflation to countries that are forced to import dollars for trade and debt payments. The yen’s weakness becomes someone else’s problem—until it circles back.

But here’s the twist: Does this actually help the U.S. economy long term?

If I were a CEO considering onshoring production, I’d likely mothball my overseas plants, but not close them outright—just in case. The high upfront costs of domestic manufacturing would, in theory, be offset by inflation… assuming wages catch up.

Note: For the U.S. housing market, inflation isn’t necessarily bad—especially when wages begin to align with price growth.

A Warning on Recession (The “R” Word)

I mentioned recession long before it became a talking point. Now, mainstream headlines are catching up, pointing to tariffs as a potential trigger. But let’s get real—2 million+ unemployed is what really drives a recession.

Here’s how I see it play out:

• We get another leg higher in inflation, perhaps a final burst.
• After that? Deflation sets in—driven by job losses, weaker consumer demand, and falling gasoline prices (yep, just look at the charts).
• A stronger USD only adds to this deflationary pressure.

This post-COVID cycle revealed something powerful: Fortune 500 companies priced in 5 years of inflation in a single year. And they’re not done. The inflationary mindset is now baked into the corporate strategy—but eventually, demand destruction and unemployment will force a pivot.

Final Thoughts

So what’s the big picture?

• USD/JPY outlook: Watch the 141 support. Below that, we enter a whole new technical zone.
• Inflation vs. deflation: Expect a short-term inflation spike followed by a wave of deflation.
• Macro consequences: Strong dollar, weaker overseas demand, and reshaped supply chains.

Stay savvy, stay skeptical—and always trust the charts more than the headlines.

The Savvy trader is one of global-view.com’s long time and highly respected members

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