The trading week continues, and the Japanese yen’s lack of short-term strength is once again standing out. Recent USD/JPY price action shows the pair up slightly more than 0.2% over the last three trading sessions, suggesting that some buying pressure remains near recent highs.

This behavior is relevant because the Bank of Japan decision was released recently, alongside new updates around the Middle East conflict. Still, these developments have not been enough to trigger consistent demand for the yen. For now, a phase of indecision could remain important for USD/JPY over the coming sessions.

Bank of Japan decision released

During today’s session, the Bank of Japan announced its latest policy decision. In line with market expectations, the central bank raised interest rates by 0.25%, taking them from the previous 0.75% level to a new reference of 1.00%. This is Japan’s highest rate in several years and marks the institution’s first rate hike of 2026.

The bank justified the increase by pointing to persistent inflation pressures and the weakness the yen has shown over the past several months. Both factors remain important drivers behind a somewhat more restrictive stance in the short term.

Source: TradingEconomics

Despite the decision, the yen has not managed to attract enough demand. First, the rate increase had already been expected by markets for several weeks. Second, the central bank’s comments after the decision did not confirm that this hiking path will continue consistently over the coming months, as future moves will depend on inflation.

This was reflected in the moderate reaction of Japan’s 10-year bond market after the announcement. Although yields advanced more than 2.5% and remain slightly above 2.6%, they are still far from their 2026 highs. In addition, Japanese yields remain well below US yields, which are close to 4.5% on the 10-year curve.

Source: TradingEconomics

Against this backdrop, the latest rate hike still does not seem enough to close the gap with the United States. The Federal Reserve is also expected to announce its interest rate decision tomorrow, which could keep markets cautious toward yen demand.

For now, there is no clear confirmation that Japan will continue raising rates over the coming months. Unless markets start to expect a more aggressive Bank of Japan, the rate differential could continue to favor dollar-denominated assets. This would make it harder for the yen to recover consistently in the short term and could keep USD/JPY in a phase of indecision over the following sessions.

Are Middle East updates not enough?

Important updates around the Middle East were also released over the weekend. The United States and Iran reportedly reached a tentative agreement to ease the conflict in the short term and move toward a possible reopening of the Strait of Hormuz, which is expected this week.

However, markets still seem to view the agreement as tentative. If the Strait of Hormuz does not fully return to normal, accumulated demand for the US dollar as a liquidity safe haven may not disappear completely in the short term.

This can be seen in the behavior of DXY. Although the index has declined on average over the last few sessions, it remains close to the 100-point reference area. This suggests that the US dollar has not lost strength consistently against its main rivals, including the yen.

Source: TradingEconomics

The dollar is still trying to hold its strength across markets, and this may also be limiting the yen’s ability to gain consistent ground in the short term. Unless more relevant updates on the reopening of Hormuz clearly reduce safe-haven demand for the dollar, a phase of indecision could remain present in USD/JPY over the coming sessions.

Technical outlook for USD/JPY

Source: StoneX, Tradingview

• The uptrend remains dominant: For several months, the most important technical structure in USD/JPY has been a long-term bullish trendline. So far, the lack of relevant bearish corrections has kept this structure as the dominant technical pattern. If selling pressure fails to stabilize over the coming sessions, this uptrend could continue to remain relevant over the following weeks.
   

• RSI: At the moment, despite the recent neutrality, RSI continues to hold consistently above the neutral 50 level. This indicates that the average buying momentum remains relevant and that the bullish pressure seen in previous weeks has not fully disappeared, which could continue to influence medium-term price action.
   
• MACD: MACD, however, shows a different short-term picture, as the histogram remains quite close to the neutral 0 line. This indicates a balance in the average strength of short-term moving averages and suggests that a phase of indecision is gaining relevance on the chart.
   

Key levels:

• 161.493 – Key resistance: 2024 high that now stands as the most important upside barrier to watch. Price moves toward this level could bring back a relevant buying bias and extend the bullish trendline over the coming weeks.
   
• 160.224 – Near-term barrier: Recent neutral zone that coincides with an important psychological level. As long as price action does not move too far away from this level, a stronger phase of indecision could start to stand out, with the possibility of a short-term sideways range forming.
   
• 159.017 – Main support: Level that coincides with the barrier marked by the 50-period simple moving average. Strong moves below this point could begin to put the bullish trendline at risk and open the door to a dominant selling bias over the following weeks.
   

Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

The EURUSD pair declined during its latest intraday trading, as it reached EMA50’s resistance, attempting to gain bullish momentum that might help it surpass this negative pressure, attempting to offload its overbought conditions on the relative strength indicators, especially with the emergence of the negative signals from them, affected by breaching a bearish corrective trend line, imposing the dominance of the main bullish trend on the short-term basis.

Goldman sees USD/JPY falling to 140-145, while Crédit Agricole forecasts a rebound to 163 by December.

The US Dollar to Japanese Yen (USD/JPY) exchange rate ended Friday near 156.25 following one of its sharpest weekly reversals of 2026.

USD/JPY fell from above 160.00 to a low near 155.31 before recovering 0.38% during Friday’s session.

The move has opened a striking disagreement between a Goldman Sachs trader and Crédit Agricole.

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The 48-hour chart shows the pair falling almost continuously from 158.95 before stabilising around 156.25.

Support is located near 155.30, while a recovery through 157.10-157.25 would weaken the immediate bearish signal.

Goldman analyst outlines 140-145 scenario

A Goldman G10 spot trader linked the Yen’s advance to hawkish Bank of Japan comments, carry-trade liquidation and speculation that Japan’s GPIF could increase its domestic bond allocation.

The trader said: “If US data comes in softer, or the Fed isn’t able to hike, and in combination with that, the BOJ come across more hawkish, I think you can see USDJPY continue to grind lower. But it really is all about this shift from the GPIF which really gets us lower into the 140-145 range over the next 6-12 months.”

The 140-145 range is a conditional trader view, not the official Goldman Sachs house forecast.

Friday’s 162,000 payroll increase also challenges one of its central assumptions by reducing the immediate risk of softer US data or a less hawkish Federal Reserve.

Crédit Agricole sees a return to 163

Crédit Agricole takes the opposite near-term view, forecasting USD/JPY at 162 in September and 163 in December.

Its projections then decline gradually to 162 in March 2027, 161 in June, 158 in September and 156 by December 2027.

The bank said: “Record levels of intervention have capped USD/JPY’s rally at 164, but for the JPY to stage a sustainable rally the BoJ needs to accelerate the pace of its rate hikes reducing the currency’s appeal as a carry funder.”

It added: “Elevated oil prices and investor concerns about Japan’s fiscal sustainability still weigh on the JPY.”

A GPIF shift could change that balance.

Crédit Agricole noted: “If Japan’s GPIF allocates more of its AUM to domestic bonds capping super-long end JGB yields, fiscal sustainability concerns would ease.”

The MUFG forecast for USD/JPY at 152 sits much closer to the Goldman trader’s direction than Crédit Agricole’s 163 call.

Price action around 155.30 and 157.25 will provide the first indication of whether the latest Yen surge is extending or beginning to correct.

Our currency coverage draws on live market data, official economic releases and published bank research.

The NFP arrives today with the odds of a rate hike from the Fed slipping back to around 50% and correspondingly the dollar sold off again yesterday. That was due to comments from Fed’s Waller who said next week’s CPI could determine whether he votes for a hike or hold. He was thus a lot less hawkish than the Fed Chair Kevin Warsh. Risk assets rallied as the dollar sold off. All eyes are now on jobs report, as well as crude oil prices today. If oil goes up again heading into the weekend, I’d expect bond yields to follow suit. That, in turn, could hurt risk appetite again. But despite everything that’s been happening, markets once again managed to rebound yesterday after every bearish attempt to drive stock prices lower. Today, though, that could change. In FX, the USD/JPY is clearly the pair to watch following the big moves in the last couple of days.

What to expect from the NFP today?

As for NFP, expectations are for only a +55k print following last month’s surprise -23k reading. Anything stronger, accompanied by a rebound in oil prices could send the dollar higher again. In that case, the USD/JPY could climb back towards the 158.00 area once more. But if the data is weaker than expected, then once again the likes of the AUD and NOK could outperform.

There has been lots of mixed signals in the markets this week, with no clear directional bias. It has made trading all the more difficult for swing traders, though it has undoubtedly been great for short term price action and trading.

Ahead of jobs report, the dollar is consolidating following yesterday’s drop, with many analysts attributing the decline to Waller’s dovish remarks. I’d be careful to not read too much into that. If crude oil prices spike again given the situation between US and Iran ahead of the weekend, the by default the dollar could find renewed support.

USD/JPY forecast: What now after the big yen rally?

The Japanese yen has weakened so far today after it suddenly become the main story in FX markets. Traders are no doubt taking profit ahead of the upcoming US jobs report, after the USD/JPY dropped around 300 pips on Thursday from its session highs, in what was the second day of sharp selling in the pair.

Will we see further weakness today, or will the dollar buying re-emerge? Well, to some degree that depends on how hot or weak the jobs report is going to be. It will also depend on oil prices, as well as any further intervention from Japanese authorities.

So, what exactly drove that sharp move in the yen?

Well, there has been plenty of speculation about intervention by Japanese authorities. On Wednesday, the USD/JPY dropped sharply in a sudden move, from around 159.60 to around 158.20, before recovering towards 159.00 handle. That immediately raised the possibility that the Japanese authorities had stepped into the market again.  But there has been no confirmation of intervention, and Thursday’s price action looked quite different. The decline was remarkably smooth, with USD/JPY falling almost every hour since the start of the Asian session, until the European close. That is not normally what you would expect from official intervention, which tends to produce a much sharper and more disorderly move.

Hawkish BoJ expectations and reverse carry trade

Another reason behind the big yen recovery may actually be expectations of a much more hawkish Bank of Japan. Governor Ueda’s recent comments have reinforced expectations of another rate increase this month, while board member Takata has even raised the possibility of a larger move.

Markets are now pricing around 50 basis points of tightening by the end of the year, compared with roughly 20-23 basis points before the late-July intervention episode. There is even some speculation that the BoJ could deliver a 50 basis point hike at its September meeting.

We also have to consider the possibility of a reverse carry trade. As expectations for Japanese rates rise, investors who had borrowed yen to buy higher-yielding assets elsewhere may start unwinding those positions, creating demand for the Japanese currency.

That said, there has been little evidence of this so far. 

USD/JPY forecast: technical analysis

From a technical analysis perspective, the USD/JPY is now starting to look a bit more bearish, but we don’t yet have confirmation of a trend reversal. 

That confirmation could potentially come with a sustained break below 155.00 on the USD/JPY. That’s because we have a couple of lows in close proximity of this psychological handle. The August low is at 155.23, while the May low is around 155.03.

Thus, a clean break below 155.00 would create the first major lower low and violate this long term bullish trend of higher highs and higher lows. 

If 155.00 handle breaks, then that could open the door to further technical selling towards 154.00 and potentially 153.00.

On the upside, 156.67 is now the first resistance level to watch. Above that, the 158.00 to 158.90 region, which was a prior support zone, could now become a major resistance zone.  Interestingly, the 200-day moving average also converges around that area.

A move back above that zone would therefore weaken the bearish outlook.

All eyes on NFP with US CPI, FOMC and BoJ to come

A much weaker than expected labour-market reading could provide the trigger for the USD/JPY to break decisively below that 155.00 handle. 

But if the US jobs data comes in stronger than expected, or oil prices spike higher again, or a combination of the two, then the dollar could find renewed support.

And with CPI to come next week, plus both the Federal Reserve and Bank of Japan meetings are due in the following week, expect increased volatility in the USD/JPY forecast and direction in the near term.

— Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R

The EURJPY pair surpassed the previously suggested negative targets, facing 180.80 support to begin forming bullish corrective waves, to settle near 181.70 level.

The suggested scenario depends on the strength of the current support in the near trading, where its stability makes us expect renewing the attempts of recovering the previous losses by its rally towards 182.35 reaching 182.80, while facing new bearish pressures and reaching below the current support, which will force it to suffer more losses by reaching 179.90 and 179.45 initially.

The expected trading range for today is between 180.90 and 182.35

Trend forecast: Bullish