Created on December 02, 2025

• US dollar/yen trading shows a sharp Monday pullback, but support near ¥155 has prompted attempts to recover.
• Despite volatility and hesitation, the long-term uptrend remains intact as the interest-rate differential continues to favor the United States.

The US dollar has fallen quite a bit against the Japanese yen during trading here on Monday, but has shown signs of trying to recover as the 155 yen level has offered a bit of support. This is a market that’s been in an uptrend for quite some time, and I don’t think that changes overall, but I do recognize that there is a certain amount of volatility and a certain amount of hesitation to own the dollar, but over the longer term, the interest rate differential will continue to favor the United States. And I just don’t see how that changes. After all, even if the Federal Reserve decides to cut rates, the reality is that the interest rate differential continues to just favor the Americans. The Bank of Japan is nowhere near being able to tighten monetary policy. And therefore, you get paid to hang on to this pair even though on a day like Monday, it’s a little tough.

I Remain Long

For the last several months, I’ve had a position favoring the US dollar in this pair, and that hasn’t changed despite the sharp pullback. And I do think that we will eventually try to get back to the 158 yen level, but we probably have some work to do to get there. The next Federal Reserve interest rate decision is in about nine days, so we’ll have to watch that.

Between now and then, there’s probably a lot of conjecture as to what happens and a lot of nonsensical handwringing and talking online that will perhaps influence a little bit of the trading, but over the longer term, this is still a trade that I do think eventually finds buyers looking to take advantage of value.

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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.