USDJPY, Dow Forecast: Trade Risks Persist

Key Events to Watch

• US-Japan Tariff Negotiations Face Roadblocks
• Risk appetite on hold amid Nvidia pullback and political/economic uncertainty
• USDJPY holds 5-month uptrend near 147
• Dow eyes 45,700 resistance for breakout confirmation

Q3 Nvidia Revenue Forecasts Slump on AI Security Concerns

Despite consistently beating market expectations with strong earnings, Nvidia’s Q3 outlook is under pressure. China’s restrictions on importing Nvidia’s H20 chips due to security concerns have weighed on the stock, preventing it from reaching new highs.

Markets that are efficient at pricing in expectations tend to amplify even minor misses. For example, Nvidia’s data center revenue came in at $41.1 billion, just shy of the $41.3 billion consensus. This seemingly small gap added to the downside pressure, given the already sensitive backdrop.

Both Nasdaq and Nvidia shares are still trading below their respective record highs, limiting upside potential for the Dow and S&P 500, especially in light of ongoing US-EU political and economic instability.

US Tariff Policy Ambiguities Delay Japan Trade Deal

Similar to other major trade negotiations with the US, the Japan-US trade deal faces roadblocks. Core issues include the ambiguity around clauses such as the “no stacking” clause and perceived favoritism toward US interests over those of its partners, increasing the difficulty of reaching a balanced agreement.

Japan’s top trade negotiator, Ryosei Akazawa, cancelled a visit to Washington at the last minute, stalling talks over a $550 billion investment package Tokyo had proposed in exchange for tariff relief. President Trump framed the offer as “our money to invest,” asserting that the US would retain 90% of the profits, while Japanese officials clarified that any investments must also benefit Japan. (Source: Investing.com)

Technical Analysis: Quantifying Uncertainties

USDJPY Forecast: Daily Time Frame – Log Scale

Source: Tradingview

USDJPY continues to maintain a bullish structure, trading above a 5-month trendline that connects consecutive higher lows from the 1.3980 trough in April 2025. The pair is now hovering near critical support around 147.

If the price breaks below 147, losses may extend toward 146.30 and 146.00, with potential for further downside toward 145.00, 144.00, and 142.70 if bearish momentum builds.
On the upside, holding above 148.70 would shift focus toward 149.70, 150.70, and 151.70, continuing the bullish trajectory.

DJIA Forecast: Daily Time Frame – Log Scale

Source: Tradnigview

While the Dow Jones holds above the 45,000 mark, it now faces key resistance at 45,700, which must be comfortably breached to confirm further bullish continuation toward 46,200, 47,100, and 48,000. These levels align with the upper boundary of a well-respected ascending channel in place since May 2025.

On the downside, should political and economic pressures dampen risk appetite, and if overbought RSI conditions resurface, a drop below 45,000 may open the door to further losses toward 44,500 and 43,800.

Written by Razan Hilal, CMT

Follow on X: Rh_waves