USD/JPY Price Forecast: Bulls await breakout above 50% Fibo. hurdle near 159.65
- USD/JPY attracts dip-buyers for the fourth straight day amid a supportive fundamental backdrop.
- Fed rate hike bets remain in play, underpinning the USD and acting as a tailwind for spot prices.
- The US-Japan rate gap and Japan’s fiscal woes weigh on the JPY amid a bullish setup for the pair.
The USD/JPY pair turns positive for the fourth consecutive day following an intraday dip to the 159.00 neighborhood during the Asian session on Thursday. Spot prices currently trade near the weekly high, though the uptick lacks bullish conviction ahead of Tokyo consumer inflation figures and US Federal Reserve (Fed) Kevin Warsh's speech on Friday.
The slightly hot US inflation data released on Wednesday reaffirmed market bets for at least one Fed rate hike in 2026, which is seen as acting as a tailwind for the US Dollar (USD). The Japanese Yen (JPY), on the other hand, struggles to lure buyers amid the wide US-Japan rate gap and concerns about Japan's worsening fiscal condition, which lends additional support to the USD/JPY pair.
The range-bound price action witnessed over the past two weeks or so could be categorized as a bullish consolidation against the backdrop of a solid recovery from the 155.25-155.20 region, or the lowest since early May, set earlier this month. Furthermore, the USD/JPY pair holds above the 100-period Simple Moving Average (SMA) on the 4-hour chart, reaffirming the constructive outlook.
Meanwhile, the Relative Strength Index (RSI) is around 57, and the Moving Average Convergence Divergence (MACD) is posting slightly positive readings. This setup suggests upside pressure remains in place. A move beyond 159.63, representing the 50% Fibonacci retracement level of the intervention-led slump from a four-decade peak, is needed to unlock a more decisive advance.
This is followed by the 61.8% Fibo. level at 160.66 and the 78.6% retracement at 162.13, before the recent swing high near 163.99 comes into view. On the downside, initial support is seen at the 100-period SMA at 158.90, with the 38.2% Fibo. retracement at 158.60 reinforces the underlying uptrend. A deeper pullback would expose the 23.6% level at 157.33 and the structural low around 155.27.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
USD/JPY 4-hour chart
Japanese Yen Price This week
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the Canadian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.18% | 0.33% | 0.32% | 0.52% | -0.30% | 0.34% | 0.48% | |
| EUR | -0.18% | 0.15% | 0.06% | 0.33% | -0.48% | 0.15% | 0.30% | |
| GBP | -0.33% | -0.15% | -0.17% | 0.22% | -0.60% | 0.00% | 0.16% | |
| JPY | -0.32% | -0.06% | 0.17% | 0.26% | -0.53% | 0.11% | 0.25% | |
| CAD | -0.52% | -0.33% | -0.22% | -0.26% | -0.77% | -0.14% | -0.03% | |
| AUD | 0.30% | 0.48% | 0.60% | 0.53% | 0.77% | 0.64% | 0.78% | |
| NZD | -0.34% | -0.15% | -0.00% | -0.11% | 0.14% | -0.64% | 0.14% | |
| CHF | -0.48% | -0.30% | -0.16% | -0.25% | 0.03% | -0.78% | -0.14% |
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).
Author
Haresh Menghani
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
