USD/JPY Price Forecast: Approaches almost two-year high near 160.70
- USD/JPY edges up to near 159.73 on the Japanese Yen’s continued underperformance.
- Former BoJ’s Wakatabe expresses doubts over whether the economy could withstand tight monetary conditions.
- Several Japanese officials have warned of intervention in the forex markets.
The USD/JPY pair trades marginally higher to near 159.73 during the early European trading session on Tuesday. The pair edges up as the Japanese Yen (JPY) underperforms due to growing concerns regarding whether the Bank of Japan (BoJ) will raise interest rates in the near term.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.06% | 0.05% | 0.03% | -0.07% | -0.05% | 0.00% | |
| EUR | 0.05% | -0.01% | 0.09% | 0.07% | -0.01% | 0.01% | 0.05% | |
| GBP | 0.06% | 0.00% | 0.11% | 0.08% | 0.03% | 0.03% | 0.03% | |
| JPY | -0.05% | -0.09% | -0.11% | -0.01% | -0.09% | -0.09% | -0.07% | |
| CAD | -0.03% | -0.07% | -0.08% | 0.01% | -0.09% | -0.07% | -0.06% | |
| AUD | 0.07% | 0.01% | -0.03% | 0.09% | 0.09% | -0.00% | 0.00% | |
| NZD | 0.05% | -0.01% | -0.03% | 0.09% | 0.07% | 0.00% | 0.00% | |
| CHF | -0.01% | -0.05% | -0.03% | 0.07% | 0.06% | -0.00% | -0.00% |
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 Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
Concerns over hawkish BoJ bets have been deepened due to growing economic worries in the wake of the Middle East crisis.
Last week, Former BoJ Deputy Governor and current member of Japan’s Council on Economic and Fiscal Policy, Masazumi Wakatabe, said that it is important to understand whether the economy can withstand tighter monetary conditions, Reuters reported.
Meanwhile, fears of Japan’s intervention into forex markets remain intact, with the USD/JPY pair approaching prior intervention levels at around 160.70. However, Japanese officials have been consistently avoiding mentioning any key forex levels.
As of writing, the US Dollar (USD) trades subduedly amid uncertainty surrounding the United States (US)-Iran permanent peace deal, with the US Dollar Index (DXY) wobbling around 99.15.
USD/JPY technical analysis
USD/JPY trades slightly higher at around 159.73, holding a bullish near-term bias as price remains above the 20-day Exponential Moving Average (EMA) at 158.94. The pair continues to consolidate near recent highs while staying underpinned by this dynamic support, and the 14-day Relative Strength Index (RSI) at roughly 60 suggests constructive but not yet overbought momentum, allowing room for further upside as long as the pair defends its underlying floor.
On the downside, immediate support is located at the 20-day EMA around 158.94, where a sustained break would hint at a deeper corrective phase toward 158.00. Looking up, the pair aims to revisit its almost two-year high at 160.74.
(The technical analysis of this story was written with the help of an AI tool.)
Bank of Japan FAQs
The Bank of Japan (BoJ) is the Japanese central bank, which sets monetary policy in the country. Its mandate is to issue banknotes and carry out currency and monetary control to ensure price stability, which means an inflation target of around 2%.
The Bank of Japan embarked in an ultra-loose monetary policy in 2013 in order to stimulate the economy and fuel inflation amid a low-inflationary environment. The bank’s policy is based on Quantitative and Qualitative Easing (QQE), or printing notes to buy assets such as government or corporate bonds to provide liquidity. In 2016, the bank doubled down on its strategy and further loosened policy by first introducing negative interest rates and then directly controlling the yield of its 10-year government bonds. In March 2024, the BoJ lifted interest rates, effectively retreating from the ultra-loose monetary policy stance.
The Bank’s massive stimulus caused the Yen to depreciate against its main currency peers. This process exacerbated in 2022 and 2023 due to an increasing policy divergence between the Bank of Japan and other main central banks, which opted to increase interest rates sharply to fight decades-high levels of inflation. The BoJ’s policy led to a widening differential with other currencies, dragging down the value of the Yen. This trend partly reversed in 2024, when the BoJ decided to abandon its ultra-loose policy stance.
A weaker Yen and the spike in global energy prices led to an increase in Japanese inflation, which exceeded the BoJ’s 2% target. The prospect of rising salaries in the country – a key element fuelling inflation – also contributed to the move.
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