USD/JPY Price Forecast: Not too far from revisiting monthly high of 157.30
- USD/JPY jumps to near 157.00 as the US Dollar strengthens amid the US-Iran war.
- BoJ’s Himino keeps the door open for further interest rate hikes.
- Investors await a slew of US employment-related and ISM PMI data.
The USD/JPY pair is up 0.5% to near 157.00 during the European trading session on Monday, rising closer to the monthly high of 157.30. The pair strengthens as the US Dollar (USD) outperforms its peers amid the ongoing war between the United States (US), Isreal and Iran.
During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.6% higher to near 98.20, the highest level seen in over a month.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.70% | 0.73% | 0.52% | 0.15% | 0.74% | 0.82% | 0.18% | |
| EUR | -0.70% | 0.02% | -0.20% | -0.54% | 0.04% | 0.11% | -0.52% | |
| GBP | -0.73% | -0.02% | -0.23% | -0.57% | 0.02% | 0.09% | -0.54% | |
| JPY | -0.52% | 0.20% | 0.23% | -0.33% | 0.25% | 0.33% | -0.30% | |
| CAD | -0.15% | 0.54% | 0.57% | 0.33% | 0.59% | 0.65% | 0.02% | |
| AUD | -0.74% | -0.04% | -0.02% | -0.25% | -0.59% | 0.08% | -0.55% | |
| NZD | -0.82% | -0.11% | -0.09% | -0.33% | -0.65% | -0.08% | -0.63% | |
| CHF | -0.18% | 0.52% | 0.54% | 0.30% | -0.02% | 0.55% | 0.63% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
Over the weekend, the US and Israel launched a series of attacks against Iran and executed 48 Iranian leaders, which included the killing of Supreme Leader Ayatollah Ali Khamenei. In response, Tehran vowed retaliation and struck various missile and drone attacks at Israeli territory and various US military bases in West Asia.
On the domestic front, investors remain cautious over the Bank of Japan’s (BoJ) plans to raise interest rates in the near term amid cooling inflationary pressures. However, BoJ Deputy Governor rising.
Meanwhile, investors brace for high volatility in the US Dollar in a US data-packed week. In Monday’s session, market participants will focus on the US ISM Manufacturing Purchasing Managers’ Index (PMI) data for February, which will be published at 15:00 GMT.
USD/JPY technical analysis
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USD/JPY trades sharply higher at around 157.00 at the press time. The pair has extended its rebound above the broken descending resistance line, plotted from the January 23 high of 159.26, shifting the near-term bias to cautiously bullish as price holds well above the 20-day Exponential Moving Average (EMA) near 155.50. The recent close back over the 20-day EMA confirms a recovery in underlying demand after last month’s pullback, while the 14-day Relative Strength Index (RSI) climbing toward 60 signals strengthening upside momentum rather than exhaustion at current levels.
Initial support emerges at the 20-day EMA around 155.50, followed by the recent swing low at 154.00, where a deeper setback would damage the nascent bullish structure. Below that, the February 12 low of 152.27 region marks a more decisive downside level that would reopen the broader correction. On the topside, immediate resistance is aligned with the late-June high at 158.40, ahead of the descending trend-line origin near 159.30, where a break would confirm a continuation of the broader uptrend.
(The technical analysis of this story was written with the help of an AI tool.)
US Dollar FAQs
The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.
The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.
In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.
Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.
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