USD/JPY Price Forecast: Approaches 200-day EMA as bears retain control below 153.00
- USD/JPY remains depressed for the fourth consecutive day and seems vulnerable to slide further.
- Prospects for further BoJ rate hikes underpin the JPY and weigh on spot prices amid a bearish USD.
- Bears await a sustained break and acceptance below the 200-day EMA before placing fresh bets.
The USD/JPY pair sticks to its bearish bias for the fourth straight day on Thursday and trades just below the 153.00 mark during the Asian session, close to a two-week low set the previous day. Moreover, the fundamental backdrop and the broader technical setup support the case for an extension of the weekly downtrend triggered by Japanese Prime Minister Sanae Takaichi's landslide election victory.
Investors now seem hopeful that Takaichi could be more fiscally responsible and that her policies will boost the economy. This might prompt the Bank of Japan (BoJ) to stick to its hawkish stance, which continues to underpin the Japanese Yen (JPY). The US Dollar (USD), on the other hand, struggles to build on the upbeat US NFP-inspired bounce amid bets that the Federal Reserve (Fed) will cut rates further in 2026 and threats to the central bank's independence. This further contributes to the offered tone surrounding the USD/JPY pair.
From a technical perspective, spot prices hold marginally above the 200-day Exponential Moving Average (EMA) at 152.50. The moving average continues to rise, keeping the broader bias supported. This is closely followed by the 38.2% Fibonacci retracement level of the 140.02-159.35 move higher, around the 152.00-151.95 region. The latter should act as a key pivotal support, and a close below would open the 50% retracement level at 149.68, where the corrective phase could deepen if breached.
The Moving Average Convergence Divergence (MACD) shows the MACD line below the signal line and below zero. The negative histogram widens, suggesting strengthening bearish pressure. RSI at 36 (neutral-to-bearish) and falling indicates sellers retain momentum.
That said, holding above the 38.2% Fibo. retracement level and reclaiming traction above the 200-day EMA would ease pressure and refocus recovery attempts, but until momentum improves, rallies could remain capped.
(The technical analysis of this story was written with the help of an AI tool.)
USD/JPY daily chart
Japanese Yen FAQs
The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.
One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.
Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.
The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.
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