2026.06.01 2026.06.01
Yen Under Pressure Near Key Intervention Threshold. Forecast as of 01.06.2026

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

The Bank of Japan’s policy meeting, combined with the government’s currency interventions, has tempered USD/JPY bulls twice. Will history repeat itself in June? Perhaps, if the BoJ refrains from raising rates. Let’s analyze the situation and make a trading plan.

Major Takeaways

• Disappointment with the BoJ will trigger a surge in USD/JPY quotes.
• The risk of currency interventions may increase.
• The yen’s position is better than it was a month ago.
• A break above 160 followed by a pullback below that level is a reason to sell the USD/JPY pair.

Weekly Fundamental Forecast for Yen

If something happens once, it may never happen again. However, if it happens twice, it is bound to happen a third time. Just as in 2024, Japan intervened in the Forex market at the end of April and beginning of May, immediately following the BoJ meeting and the resulting decline in the yen. The central bank disappointed, and the government was forced to intervene to stop USD/JPY bulls. As the June Board of Governors meeting approaches, there is a sense of déjà vu.

The futures market indicates a 75% probability of an overnight rate hike at the Bank of Japan’s first summer meeting. However, the latest data on slowing inflation could allow doves to convince the rest of the BoJ officials of the need to continue the pause in the monetary tightening cycle. If that happens, the USD/JPY pair will likely surge above the psychologically important 160 level.

Speculative Positions on Japanese Yen

Source: Bloomberg.

Speculators are counting on this scenario. Hedge funds and asset managers have increased their net short positions in the yen to their highest levels in nearly two years, despite all the government’s warnings. As a result, Satsuki Katayama has resumed verbal interventions. The finance minister stated that the authorities were ready to take decisive action if they observed increased volatility or signs of speculative activity in the Forex market.

At the turn of April and May, Japan spent ¥11.7 trillion on currency interventions. The amount exceeded the market estimate of ¥10 trillion and sparked rumors that there may have been more than two interventions within a short period. If so, they could resume before the USD/JPY pair reaches the 160 level.

USD/JPY Rate and Interventions on Forex

Source: Bloomberg.

In reality, currency interventions are merely a way to buy time, not a turning point. Although the yen is currently trading at the same levels as in early May, the fundamental outlook is far more favorable for it now than it was then. The conflict in the Middle East is about to end, and oil prices will likely fall, benefiting Japan—a net importer of crude oil—more than the US. At the same time, the Fed will have less reason to raise the federal funds rate, and demand for the dollar as a safe-haven asset may decline.

All of this, combined with excessively inflated speculative positions on the yen, allows Eurizon SLJ Capital to forecast that the upward trend in USD/JPY quotes will reverse. It is quite possible that the authorities will not need to buy more time, especially if the Bank of Japan meets expectations and raises the overnight rate to 1% in June.

Weekly USDJPY Trading Plan

While in April and May I suggested buying the USD/JPY pair following currency interventions, such interventions could now reverse the uptrend. If the price pierces the 160 level, and a sharp downward move follows, short positions can be considered.

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.

The EURJPY pair remains affected by the positivity of the main indicators, which forces it to delay the bearish correction trend, to notice its fluctuating near 185.80 level, attempting to find an exit for recording more gains in the near and medium period.

The continuation of providing positive momentum by the main indicators and the stability above the extra support at 184.80, we recommend waiting for achieving the required breach to ease the mission of recording extra gains by its rally towards 186.25 and 186.65.

The expected trading range for today is between 185.20 and 186.65

Trend forecast: Bullish

The GBPJPY pair returned to form some bullish waves, affected by forming an extra strong support at 213.30 level, to renew the pressure on 214.50 barrier, which represents %66.8 Fibonacci correction level.

The attempt of providing positive momentum by the main indicators, as stochastic approaches 80 level might ease the mission of surpassing the current barrier, announcing its readiness to record extra gains by its rally towards 214.95 and 215.25, while the failure of the breach will force it to provide mixed unstable trading with a new chance for the decline towards 213.30.

The expected trading range for today is between 214.00 and 215.25

Trend forecast: Bullish

The GBPJPY pair returned to form some bullish waves, affected by forming an extra strong support at 213.30 level, to renew the pressure on 214.50 barrier, which represents %66.8 Fibonacci correction level.

The attempt of providing positive momentum by the main indicators, as stochastic approaches 80 level might ease the mission of surpassing the current barrier, announcing its readiness to record extra gains by its rally towards 214.95 and 215.25, while the failure of the breach will force it to provide mixed unstable trading with a new chance for the decline towards 213.30.

The expected trading range for today is between 214.00 and 215.25

Trend forecast: Bullish

– Written by


David Woodsmith

STORY LINK Pound to Dollar Forecast for This Week: Rising Yields Hold the Key for GBP/USD

The Pound to Dollar exchange rate (GBP/USD) remained on the defensive as investors focused on rising US bond yields, persistent inflation concerns and political uncertainty in the UK.

While Sterling found support below the 1.3400 level, markets continue to assess whether higher US yields and a potentially more hawkish Federal Reserve will keep the Dollar in demand through the summer.

GBP/USD Forecasts: Yields pivotal

UBS is positive on the Pound and has a 12-month Pound to Dollar (GBP/USD) exchange rate forecast of 1.40.

Standard Chartered, however, considers that there is a bearish bias for the currency and expects GBP/USD to weaken on a 12-month view.

GBP/USD edged lower during the week amid a firm dollar tone, but found support below the 1.3400 level.

Politics will inevitably be a key focus during June with the Makerfield by-election on June 18th and potential formal challenge on Prime Minister Starmer.

MUFG commented; “Based on the preferences of Labour Party members, a soft-left candidate such as Andy Burnham, Angela Rayner, or Ed Miliband is favoured to become the next leader, implying a potential shift to the left in policymaking. Andy Burnham’s commitment to the self-imposed fiscal rules has helped curtail Gilt market selling but if Burnham wins Makerfield and then becomes prime minister, there will no doubt be episodes when bond investors question his commitment to fiscal stability.”

UBS remains positive on the Pound; “While GBP/USD could remain suppressed in the near term due to UK political noise and elevated oil prices, we expect a recovery throughout the year due to several factors: We expect the Iran conflict to be resolved eventually, leading to lower oil prices that support the Pound; UK political uncertainty is likely to fade in coming months.

It added; “the pound is supported by robust UK data and a high yield with an upward bias while the USD is capped.”

Looking at the US outlook, UBS commented; “Political uncertainty is likely to shift from the UK to the US in 3Q-4Q ahead of mid-term elections in November.”

Standard Chartered is negative on the Pound fundamentals; “GBP/USD rangebound with bearish bias: The UK economy faces persistent stagflation pressures and a weakening labour market. While the BoE remains attentive to inflation, we anticipate that a deteriorating growth outlook will eventually force a more dovish pivot than currently priced.

It added; “Furthermore, the UK’s structural vulnerabilities, including limited fiscal flexibility and heightened political uncertainty bring further downside risk.”

MUFG is also positive on the dollar outlook; “US yields look set to continue to provide support for the dollar with Fed officials more aligned with focusing on inflation risks. Fed Governor Waller’s speech last week underlined the shift with a signal of a potential rate hike if “inflation does not abate soon”.

ING commented on upward pressure on US yields; “The market briefly priced one full 25bp Fed hike last Friday on his comments that the longer oil prices stay this high, the greater the risk of inflation expectations becoming unanchored and the Fed needing to hike. That briefly triggered some bearish flattening of the US yield curve – a clear dollar positive.

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The USD/JPY as of this writing is near the 159.300 ratio with price action that has incrementally reestablished the higher realms of the currency pair, this after seeing dynamic volatility in late April and early May.

Big players and small traders in the USD/JPY are watching what can be compared to an old fashioned cowboy movie. One in which the bad guy gets warned repeatedly to stop acting in a certain way and does not. Then the person or group who has warned the bad guy to stop, gets mad and takes action. This is what large speculators and financial institutions have been doing with the Bank of Japan regarding the USD/JPY. The currency pair currently lingers near the 159.300 mark as the last day of trading in May still has a handful of hours to go.

As June’s trading gets ready to be underway early next week, a reminder of what we have seen in the past handful of weeks is important. In late April the USD/JPY was near blistering highs of almost 160.700 on the 30th of April. The Bank of Japan issued warnings to those who were buying the USD/JPY, and said they would intervene. The BoJ apparently did exactly that and a swift and dynamic rush downwards occurred. A low of 155.560 was seen briefly late on the 30th of April.

April’s Warning and May’s Reversals in the USD/JPY

By the 6th of May the USD/JPY was again testing lows and this time touched the 155.000 vicinity. However, since those lows were seen incremental buying has started again. Large players and financial institutions once again have been plowing into the buying side of the USD/JPY and as the month of June starts to approach it is not without reason that some folks are anticipating the Bank of Japan to be heard from again.

As the USD/JPY traverses above 159.250 as of this writing the currency pair is back within its higher realm. No, the currency pair has not yet hit 160.000 in May, but it is close enough to give folks a rather interesting choice regarding wagering on direction. Yesterday’s high in the USD/JPY hit the 159.660 area before trending slightly lower. Before going into this weekend, Forex traders will have to decide what they want to do as they anticipate a possible warning from the BoJ of intervention, and weigh that against depending on their betting stances – what is going to happen in the Middle East over the coming days when the markets are not trading and how it will effect risk appetite.

Near-Term Wagers and a Monthly Outlook

As the month of June gets ready to start, the USD/JPY is trading at highs. It has traded higher before, yes. But the Bank of Japan has retaliated against buying of the USD/JPY with loud rhetoric and also with cash interventions.

• Traders who are tempted to be long – buy – the USD/JPY based on the knowledge the currency pair has gone higher are playing with fire. They need to be careful.

• It is correct the Bank of Japan warnings about those who are buying the USD/JPY can be taught a lesson via a powerful intervention, but this also shows that the BoJ’s monetary policy is being looked at by financial institutions as poor.

• It is clear financial institutions and large players are willing to bet against the BoJ even as the central bank threatens interventions to hurt them.

USD/JPY Outlook for June 2026:

Day trading in the USD/JPY is extremely dangerous for limited retail speculators. A lot of risk management is needed. Betting on reversals lower via an intervention coming from the BoJ or just a shift in momentum might actually be a rather intriguing decision. However, incrementally the USD/JPY continues to traverse higher terrain and often shows an ability to move upwards, because large players do not like the BoJ’s policies.

Looking for more moves higher should be done with limited targets and not expose a day trader to too much time lapse. Because the Bank of Japan just like in the old fashioned cowboy westerns is warning folks to be careful. An interesting question is – who is the bad guy in this movie? Is it the Bank of Japan or the financial institutions betting against it? Small speculators may just want to watch from the sidelines to stay safe.

Want to trade our USD/JPY forex analysis and predictions? Here’s a list of forex brokers in Japan to check out.

– Written by


Frank Davies

STORY LINK Pound Sterling to Dollar Forecast: GBP Rebounds as Iran Deal Hopes Hit USD

The Pound to Dollar exchange rate (GBP/USD) rebounded from intraday lows as improving sentiment surrounding US-Iran negotiations weighed on the US Dollar and encouraged investors back into risk-sensitive assets. Hopes that progress could eventually lead to the reopening of the Strait of Hormuz helped curb safe-haven demand for the Greenback, allowing Sterling to recover ground.

GBP/USD Forecasts: Rebound from Daily Lows

The Pound to Dollar (GBP/USD) exchange rate dipped to near 1.3400 early in Europe on Friday before recovering strongly to above 1.3475 during US trading as the dollar lost ground amid hopes that the US and Iran could secure some form of deal.

According to UoB; “GBP is unlikely to break the strong resistance at 1.3480. Support is at 1.3435.

It added; “A breach of 1.3415 would indicate that GBP is more likely to range-trade rather than continuing to rebound.”

Traders were reluctant to maintain aggressive positions into the weekend and there was also an element of choppy trading with month-end position adjustment also having an impact.

There was further choppy trading on Iran headlines with traders reacting to the latest comments and hopes for a deal.

Scotiabank commented; “Focus remains centered on the state of play between the US and Iran, with a renewed sense of confidence in the possibility of a deal that would reopen the Strait of Hormuz. Details include a 60 day ceasefire extension, Iran’s removal of all of its mines from the Strait within 30 days, and the launching of further talks on Iran’s nuclear program.”

According to MUFG; “If the reported details are true and if President Trump does accept these conditions and we have a 60-day extension with, crucially, the Strait of Hormuz reopened we certainly would expect further near-term downside pressure on front-end rates and for the US dollar to weaken further.”

ING expressed some caution; “The ceasefire extension in Iran is helping markets trade optimistically again, but we ultimately need to see a reopening of the Strait of Hormuz to take the dollar much lower from here.”

The outlook for monetary policy and interest rates will also be a key element. In comments on Friday, Bank of England Governor Bailey sounded cautious on the potential for interest rate hikes.”

He noted that allowing inflation to run above the BoE’s 2% target was justified given uncertainty over the economic impact of the Iran war and the weak pace of growth.” He did add; “that tolerance would weaken if signs of second-round effects begin to emerge.”

According to Kirstine Kundby-Nielsen, senior FX strategist at Danske Bank “I don’t expect the Bank of England to hike to the extent that it’s priced by market.”

She added; “The UK economy isn’t in great shape. If we get close to a ceasefire, some of these underlying macroeconomic developments start taking focus again.”

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The EUR/USD pair finished the last week of May at around 1.1660, barely up compared to the previous week’s close. The US Dollar (USD) shed some ground on the back of hopes, but losses were limited by persistent speculation that the Federal Reserve (Fed) will have no choice but to hike interest rates before year’s end.

The song remains the same

Financial market activity revolved once again around war-related headlines. The Middle East crisis led the way, with sentiment staying positive at the beginning of the week but deteriorating later amid headlines of back-and-forth attacks between the United States (US) and Iran. By Thursday, however, news that they had reached an agreement on a Memorandum of Understanding to extend the ceasefire for 60 days, open the Strait of Hormuz, and start nuclear talks revived the positive mood and maintained the USD under selling pressure.

There is, however, a caveat: US President Donald Trump has yet to approve it, while Iran’s authorities claim the memorandum is not yet finalized. Even further, Iran’s top negotiator Mohammad Baqer Qalibaf said on Friday that they have no trust in guarantees or words, and added: “Only actions are the measures, no action will be taken before the other side acts.” Also on Friday, President Trump said that the naval blockade will be lifted and ships caught in the Strait of Hormuz may start the process of “heading home.”

Nevertheless, cautious optimism prevails.

Gearing up for central banks

The US Fed and the European Central Bank (ECB) will announce their monetary policy decisions in roughly two weeks, and market players are already gearing up for it. Recent data shows the hike path is more likely day after day, as inflation keeps running above the central bank’s goals.

In the US, inflation rose at an annualized pace of 3.8% in April, up from 3.5% in March, according to the Personal Consumption Expenditures (PCE) Price Index. The core PCE Price Index rose 3.3% as anticipated. The Fed’s favorite inflation gauge is at its highest in roughly two years, and has been above the central bank’s goals since March 2021.

Continued and rising inflationary pressure, alongside the lack of material progress on the war front – the latest major source of inflation – pushes speculative interest into betting on interest rate hikes.

Across the pond, things are slightly better, but still worrisome: Germany published the preliminary estimate of the May Consumer Price Index (CPI), which rose 2.6%, easing from the 2.9% posted in April. The Harmonized Index of Consumer Prices, the ECB’s preferred inflation reading, declined 0.1% on a monthly basis and rose 2.7% on a yearly basis. Market players are already pricing in a rate hike when European policymakers meet in June.

Stagflation fears rise, employment taking center stage

Other than that, the US downwardly revised the Q1 Gross Domestic Product (GDP) estimate to 1.6% from the first calculation of 2%.

While far from confirmed, the stagflation ghost hovers over all major economies as inflation keeps rising while growth becomes tepid.

The first week of June will revolve around the second leg of the Fed’s mandate: employment. The US will release the April JOLTS Job Openings report, the monthly ADP survey on Employment Change, Challenger Job Cuts, and weekly unemployment claims ahead of the May Nonfarm Payrolls (NFP) report scheduled for Friday.

Growth-related data will also make it to the wires, as ISM will release the Services and the Manufacturing Purchasing Managers’ Indexes (PMIs) for May.

Germany and the Eurozone will publish Retail Sales updates, while the Euro bloc will unveil the preliminary estimate of the HICP also for May, expected to hit 3.3% YoY, after posting 3% in April. Such an outcome or a higher one will result in market participants fully pricing in an interest rate hike by the ECB in June. Finally, the Eurozone will publish a second estimate of the Q1 GDP, expected to be confirmed at 0.1% QoQ.

The macroeconomic calendar will also include some Fed and ECB speakers, the last round of testimonies ahead of the central banks’ announcements later in the month.

EUR/USD Technical Outlook:

Technically, the EUR/USD pair is losing its bearish strength, although the risk remains skewed to the downside. The daily chart for the pair shows it is trading below all its moving averages, with the 20-day Simple Moving Average (SMA) gaining downward strength and providing resistance at 1.1675, while slowly grinding below the 100-day SMA at 1.1698 and the 200-day SMA at 1.1683. The SMAs cluster provides resistance, limiting the bullish potential of EUR/USD. At the same time, the Momentum indicator remains directionless in negative territory, while the Relative Strength Index (RSI) indicator oscillates around the neutral 50 line, hinting that recovery attempts are likely to face supply on shallow bounces.

In the weekly chart, EUR/USD remains well above the 100- and 200-week SMAs at 1.1266 and 1.0966, respectively, yet with the upside limited by a flat 20-week SMA at 1.1690. Technical indicators ticked north but remain in negative territory, signaling easing selling pressure yet not enough to support additional gains ahead. Near-term support comes at 1.1620, ahead of the 1.1560 region. Additional declines expose 1.1470, a long-term static support level.

Near-term support comes at 1.1620, ahead of the 1.1560 region.(The technical analysis of this story was written with the help of an AI tool.)

The GBPJPY pair provided some weak sideways waves by its stability near 214.00, affected by the continuation of the main indicators contradiction beside forming extra support at 213.30 level, obstructing the chances of resuming the previously suggested corrective trend.

The sideways range trading might continue currently, however the stability below 214.50 barrier makes us wait for gathering negative momentum, to repeat the pressure on 213.30 support, to find an exit for targeting more corrective stations by reaching 212.70 and 212.20, while breaching the barrier and holding above it will cancel the negative overview, providing strong chance for forming bullish waves in the upcoming period trading.

The expected trading range for today is between 212.75 and 214.20

Trend forecast: Bearish