Created on November 04, 2025

• The US dollar held steady against the Japanese yen on Monday near the key ¥154 level.
• With strong support near ¥153 and ¥150, buyers remain in control as interest rate differentials continue to favor the dollar.

The US dollar has been fairly quiet against the Japanese yen during trading on Monday, as we hover around the crucial ¥154 level. The ¥154 level has stabilized the market over the last couple of days after we had seen the Thursday session jump to the upside. Short-term pullbacks offer the opportunity of buying the US dollar, especially near the ¥153 level.

Longer-Term Traders Use Dips as Entries

With this being the case, this is a market that I think will end up being an opportunity for longer-term traders to take advantage of the interest rate differential, as the Bank of Japan is almost certainly going to be stuck with loose monetary policy. Meanwhile, the FOMC press conference suggested that there may be no interest rate cuts in December—it just wasn’t done yet, even though many traders had anticipated the Federal Reserve would cut rates multiple times.

This doesn’t mean that it won’t happen, but looking at the overall situation at the moment, it’s likely that we will continue to see plenty of value hunters on dips. If we were to break down below the ¥152 level, then I think at this point we could test the 50-day EMA, which sits right above the ¥150 level. For me, the ¥150 level is the absolute floor in the trend.

At this point, I think we’ve got a situation where we could go looking to the ¥155 level. Ultimately, this is a market that has been bullish for a while, and I think short-term opportunities will continue to present themselves with pullbacks. The interest rate differential allows traders to take advantage of dips and get paid at the end of every day while waiting for the longer-term trade to play out.

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

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.