2026.09.08 2026.09.08
Japan Finally Gets Its Stronger Yen. Forecast as of 08.09.2026

Dmitri Demidenkohttps://www.litefinance.org/blog/authors/dmitri-demidenko/

Japan appears to have finally achieved its long-standing goal of strengthening the yen. Currency intervention, speculation about aggressive BoJ rate hikes, and renewed capital inflows have all helped drive the Japanese currency higher. Let’s examine the situation and develop a trading plan for the USD/JPY pair.

Major Takeaways

• US participation in currency interventions is a necessity.
• The Bank of Japan will take a more aggressive stance.
• Pension funds’ appetite for Japanese assets is growing.
• Long trades can be opened if the USD/JPY pair breaks through 154.4.

Weekly Fundamental Forecast for Yen

Perseverance pays off. Japan has finally achieved what the government had long dreamed of—strengthening the yen. The decline of USD/JPY to 7-month lows began with currency intervention and continued as fundamentals shifted and the pair broke below the 155 technical level, triggering massive liquidation of long trades and fueling the decline.

Scott Bessent has every reason to be proud of himself. According to the Treasury Secretary, US participation in the foreign exchange market intervention was necessary. Japan is the largest holder of US Treasuries, and its sale as part of currency interventions will lead to higher yields. At the same time, the yen’s weakness contributed to the devaluation of other Asian currencies, which undermined the competitiveness of US manufacturers.

Japan’s Foreign Securities Holdings

Source: Bloomberg.

Indeed, according to Japan’s Ministry of Finance, holdings of foreign securities fell by $87.8 billion at the end of the summer, roughly matching the scale of foreign exchange interventions at the turn of July and August.

However, previous interventions more often failed than succeeded in reversing the USDJPY pair. Tokyo needed to change the fundamentals. This was done effectively. First, Policy Board Member Hajime Takata hinted that the decision to raise rates by 25 basis points in September was not set in stone. The BoJ might act more aggressively. Then, Nomura Securities stated that the central bank would raise rates by a quarter of a point at each meeting—in September, October, and December.

The acceleration of the monetary tightening cycle is not the only driver behind the sharp decline in USD/JPY quotes. Rumors are circulating that the growing attractiveness of Japanese assets is prompting large institutional investors to buy them, which will contribute to capital inflows into Japan and a stronger yen.

Bond Yields in US and Japan

Source: Bloomberg.

The largest pension funds in Japan and Norway have signaled plans to increase their exposure to the world’s third-largest economy. In August, the GPIF held an unscheduled meeting for the first time in seven years, reportedly to discuss a potential reallocation of its assets. Norway’s GPFN, meanwhile, announced changes to its investment strategy. Previously, the fund allocated its portfolio based on each country’s share of the global economy; it will now allocate based on market capitalization. The shift could bring an additional $17 billion into Japanese securities, providing another potential source of support for the yen.

Weekly USDJPY Trading Plan

The issue of capital flows remains unresolved, while any meaningful shift in the fundamentals will ultimately depend on the Bank of Japan’s policy stance—which it has yet to clearly articulate. It is therefore quite possible that yen bulls are getting ahead of themselves. Against this backdrop, stronger-than-expected US inflation data could trigger a rebound in USD/JPY. If the price pierces the 154.4 resistance level, consider opening long positions.

This forecast is based on the analysis of fundamental factors, including official statements from financial institutions and regulators, various geopolitical and economic developments, and statistical data. Historical market data are also considered.

Price chart of USDJPY in real time mode

EUR/USD trades near 1.1627 on Tuesday after a US jobs report that came in almost three times above forecast. The data supported the dollar and strengthened expectations of tighter Federal Reserve policy. Attention now shifts to the European Central Bank meeting on 10 September, where the rate increase is already fully priced in, and the guidance that follows will determine the euro’s next move.

US Jobs Data Put the Dollar Back on the Front Foot

The US labour market delivered its strongest month since March. Nonfarm payrolls rose by 162,000 in August against a market forecast of around 56,000. The unemployment rate held at 4.1%, average hourly earnings rose 3.1% year-on-year, and the Bureau of Labor Statistics revised June and July higher by a combined 55,000, turning July’s previously reported job loss into a gain.

Nonfarm payrolls measure how many paid jobs the US economy added during the month, excluding farm work. They provide one of the clearest monthly indications of how much room the Fed has to adjust interest rates.

A labour market this resilient takes the pressure off the Fed to support growth and leaves inflation as its main concern. After the release, money markets raised the probability of a September rate increase to around 58%, up from roughly 52% before the data. Higher expected US rates make dollar deposits more attractive, so the dollar gained ground and EUR/USD settled into a narrow range.

Why the ECB Meeting Matters More Than the Decision Itself

All 65 economists polled by Reuters expect a 25-basis-point increase in the deposit rate to 2.50%. A basis point is one hundredth of a percentage point, so 25 basis points equal 0.25%. Money markets are pricing in the same outcome with near-full certainty and expect the deposit rate to rise further, reaching around 3.00% by June 2027. That implies two more increases after this week.

When an outcome is fully priced in, the decision itself rarely moves the market. The euro will take its cue from the press conference. Eurozone inflation accelerated to 3.3% in August, driven largely by energy costs, and Christine Lagarde has already identified the energy shock as an upside risk to prices.

That leaves one open question for Thursday. If Lagarde confirms that further tightening remains under discussion, the euro could gain support against a dollar that is also pricing in higher rates, with EUR/USD potentially testing 1.1655, the upper edge of its current range. If she delivers the rate increase and keeps every option open without committing to a path, the rate outlook remains in the dollar’s favour, and the pair could move towards 1.1525.

German Factory Orders Add a Second Layer

New orders in German manufacturing rose 2.5% in July after an upwardly revised 3.7% increase in June. The market expected 0.3%, and this was the third consecutive monthly increase.

The detail matters for anyone trading the euro. Excluding large-scale contracts, orders fell 1.4% from June. Domestic orders jumped 9.1% while foreign orders fell 2.1%, with demand from outside the euro area down 10.1% and demand from inside the bloc up 12.1%. Most of the headline strength came from shipbuilding, rail and aircraft contracts.

German industry is recovering, but that recovery currently relies on a small number of large contracts and on demand from within Europe. For the ECB, this supports the case that the economy can absorb higher rates.

EUR/USD Technical Analysis

On the four-hour chart, EUR/USD is building a consolidation range around 1.1620. An upward move towards 1.1655 remains on the table, with a decline towards 1.1525 seen as the following stage.

The MACD indicator supports this reading. MACD compares two moving averages of price and shows whether momentum is building or fading. Its signal line sits above zero and points firmly upwards, reflecting bullish momentum with room for the move higher to continue in the near term.

On the hourly chart, the market has completed a downward wave to 1.1620. The pair is now consolidating above that level. The working scenario for today is another upward leg towards 1.1655.

The Stochastic oscillator supports this view. The Stochastic oscillator shows where the current price sits within its recent trading range. Its signal line is above 20 and points upwards towards 80, indicating that the move higher still has room to develop.

Conclusion

EUR/USD enters the ECB week with the technical picture pointing towards 1.1655 in the near term, while the fundamental picture stays split between two central banks moving in the same direction. The rate increase to 2.50% is already priced in, so the euro’s next move depends on the guidance that follows.

While the pair holds above 1.1620, the upside scenario remains the working one, with 1.1525 the level to watch further out should the move higher fail to hold. The US inflation report due next week will be the next catalyst on the dollar side of the pair, so the levels set this week are likely to be tested again quickly. Traders who want to follow the reaction in real time can place both levels on the chart in advance and watch how EUR/USD behaves around them during the decision.

Disclaimer
Any forecasts contained herein are based on the author’s particular opinion. This analysis may not be treated as trading advice. RoboForex bears no responsibility for trading results based on trading recommendations and reviews contained herein.

The GBPJPY pair is surrounded by negative pressures, forcing it to break at 210.40, to move to a new negative station, to suffer big losses by reaching 207.10.

Stochastic stability within the oversold level might force the price to provide mixed trading, its stability below 210.40 confirms its surrender to the bearish trend, increasing the chances of targeting in the near period at 206.70 followed by 205.00 level.

The expected trading range for today is between 206.70 and 209.10

Trend forecast: Bearish

– Written by


David Woodsmith

STORY LINK GBP/USD Price Forecast: Pound Sterling Gains as Healey Reassures Bond Markets

The Pound US Dollar (GBP/USD) exchange rate edged higher on Monday, with the pairing finding some support as markets assessed comments from UK Chancellor John Healey on the economy.

At the time of writing, GBP/USD was trading at $1.3536, around 0.15% higher on the day.

The Pound (GBP) strengthened modestly on Monday following comments from UK Chancellor John Healey.

Healey reiterated his commitment to fiscal discipline, aiming to reassure markets after recent turbulence in the UK bond market.

His speech also placed considerable emphasis on supporting economic growth, with government investment, innovation, devolution and reducing red tape identified as measures that could help drive activity.

Sterling received a mildly favourable response to the Chancellor’s remarks, although the reaction was relatively muted.

The Pound gained ground against several of its peers, but remained some way from making significant advances.

Meanwhile, the US Dollar (USD) lacked momentum on Monday, with US markets shut for the Labor Day federal holiday.

The closure appeared to dampen demand for the currency.

The ‘Greenback’ also struggled to gain traction as mixed conditions across financial markets restricted movement in the safe-haven currency.

Asian markets had started the week on a positive footing after reports that Beijing would provide $54bn to state-owned banks and insurers.

Risk appetite cooled during the European session, although the resulting uncertainty did little to lift USD.

The currency remained subdued as a result.

Near-Term GBP/USD Forecast: Risk Aversion to Support the Dollar?

Looking ahead, the economic calendar is relatively quiet for both GBP and USD on Tuesday, which could leave the Pound to US Dollar exchange rate more exposed to broader market movements.

Risk appetite may prove crucial for the pairing.

A further escalation in Middle East tensions could prompt investors to turn more cautious, potentially increasing demand for the safe-haven ‘Greenback’.

Geopolitical uncertainty in Europe could have a similar effect, while a worsening trade dispute between the US and Canada may also encourage risk aversion and strengthen the appeal of the US Dollar.

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