USD/JPY FTSE 100 Forecast: Two trades to watch

USD/JPY holds steady after recent gains, FOMC minutes are up next

• Japanese bond yields fall after a recent rise
• USD rises from recent lows after improving consumer confidence
• USD/JPY doji candle shows indecision

USD/JPY is holding steady after three days of losses amid a stronger dollar and as investors digest recent comments from BoJ policymakers and developments in the bond market.

BoJ Governor Ueda noted that ongoing trade negotiations with the US are creating an uncertain outlook, and he reiterated the central bank's ability and willingness to adjust policy as needed.

The bond market is also in focus after Japanese bond yields declined sharply following reports that the Ministry of Finance is considering reducing the issuance of super-long-term bonds. This move is an effort to contain rising yields following last week's disappointing 20-year bond auction.

The US dollar is extending gains against its major pairs amid a fall in ultra-long treasury yields, which is easing concerns over the US fiscal outlook.

Stronger-than-expected U.S. consumer confidence data from the Conference Board yesterday also boosted the US dollar, supporting the view that a serious economic downturn could be avoided.

On the trade front, there is growing optimism that more trade deals are in the pipeline, particularly following Trump's decision to delay steeper EU tariffs until July 9th.

Today, the FOMC meeting minutes will be released, and they could provide further details into policymakers' decision to leave interest rates unchanged again. The minutes could also provide some clues about the Fed's outlook for rates, given the ongoing uncertainty and erratic trade policies from Trump.

However, any recovery in the USD could be limited given ongoing concerns over the US budget deficit.

USD/JPY forecast – technical analysis

USD/JPY rebounded lower from 148.60 before finding support on the falling trendline, the upper band of the falling channel, at 142.10 and recovering higher. The price pushed above 144.00, but the Doji candle and RSI at 50 point to indecision.

Buyers will need to rise above 145.00, the round number, and 146, the May 2 high, to extend gains towards 148.60.

Sellers will need to break below 142.10 to create a lower low and extend losses towards 140.00, the 2025 low.

FTSE cautious with earnings in focus, Kingfisher ahead of the Nvidia main event

• Kingfisher, Pet’s at Home earnings
• Kantar grocery inflation rose to 4.1%
• FTSE100 tests 8800 resistance

The FTSE has opened cautiously despite strong gains on Wall Street overnight following improving consumer confidence data. Investors are digesting earnings from Kingfisher and Pets at Home ahead of today’s main event, Nvidia’s earnings after the US close.

Pets at Home posted profits in line with forecasts and reiterated its guidance. The pet store and veterinarian's service chain posted revenue of £1.5 billion, with profit before tax rising 14% to 120.6 million. The current year guidance was reiterated to fall between £115 million and £125 million, with the firm noting that the year has kicked off as expected.

Kingfisher, the owner of B&Q and Screwfix, is falling despite posting a revenue resurgence in Q1 amid strong seasonal sales and good weather. Sales rose £3.3 billion at a 1.6% rise in the previous year, and like-for-like sales increased by 1.8%.

Elsewhere, supermarkets are booking modest gains despite data showing that grocery price inflation jumped to 4.1% for the four weeks to May 18, its highest level since February last year, and up from 3.8% last month. Employers had warned that employer tax rises imposed by the Labour government’s first budget, together with an increase in the minimum wage, would add inflationary pressures.

Attention is turning to the big event, which will be earnings from Nvidia after the close. The FTSE is lacking in tech stocks, so any impact on the UK index will likely be limited. The AI chip maker is expected to post a 66% increase in revenue to $43.3 billion as AI demand continues to drive record sales. However, attention will be on the cost of US chip restrictions to China, with expectations of a $5.5 billion charge.

FTSE forecast - technical analysis

The FTSE 100 recovered from the 7535 2025 low, extending gains to 8800. With momentum supporting the bulls, buyers will look to rise above 8800, to extend gains towards 8910 and fresh record highs.

On the downside, support can be seen around 8640/50. A break below here opens the door to the 8500 support zone.