|

USD/JPY Price Forecast: Consolidates above 160.50, two-year high amid intervention risks

  • USD/JPY enters a bullish consolidation phase near its highest level since July 2024, set on Wednesday.
  • The JPY bears turn cautious amid intervention fears, capping the upside amid a modest USD downtick.
  • The technical setup makes it prudent to wait for some consolidation before placing fresh bullish bets.

The USD/JPY pair extends its sideways consolidative price move through the early European session on Thursday and trades just above mid-160.00s, near the highest level since July 2024, touched the previous day.

Japan's Chief Cabinet Secretary Minoru Kihara said during a regular press conference earlier today that the government is ready to respond appropriately to exchange-rate moves at any time. The comments revived fears about a potential intervention, holding back traders from placing fresh bearish bets on the Japanese Yen (JPY). This, along with a modest US Dollar (USD) downtick, acts as a headwind for the USD/JPY pair.

Meanwhile, the Bank of Japan (BoJ) raised interest rates to 1.00%, or the highest since 1995, on Tuesday. This, however, is far below the US Federal Reserve's (Fed) interest rate target range of 3.5% to 3.75%. The persistently wide rate differential between the US and Japan continues to fuel the JPY carry trade, keeping the USD/JPY pair elevated above the 160 psychological mark, and favors bullish traders.

From a technical perspective, the recent solid rebound from the 200-day Exponential Moving Average (EMA) and a subsequent strength beyond the 159.50 horizontal barrier keep the broader uptrend intact. Moreover, momentum indicators stay constructive, with the Relative Strength Index hovering in the low 60s and the Moving Average Convergence Divergence (MACD) line holding just above zero.

The aforementioned setup hints that bullish pressure is moderating but not yet exhausted and that dips remain supported rather than signaling a reversal. That said, the near-term risk profile favors consolidation at elevated levels while leaving the door open for another push higher in the broader trend.

Meanwhile, any meaningful corrective decline is likely to find decent support and attract buyers at the 200-day EMA near 156.23 to protect the prevailing bullish structure. As long as the USD/JPY pair holds above this dynamic floor and momentum gauges avoid a sharp deterioration.

(The technical analysis of this story was written with the help of an AI tool.)

USD/JPY daily chart

Chart Analysis USD/JPY

Japanese Yen Price Last 30 days

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 30 days. Japanese Yen was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD1.33%1.16%1.14%2.70%1.98%1.64%2.15%
EUR-1.33%-0.16%-0.18%1.36%0.67%0.28%0.82%
GBP-1.16%0.16%0.00%1.52%0.81%0.46%0.98%
JPY-1.14%0.18%0.00%1.53%0.76%0.46%0.94%
CAD-2.70%-1.36%-1.52%-1.53%-0.67%-1.05%-0.54%
AUD-1.98%-0.67%-0.81%-0.76%0.67%-0.36%0.16%
NZD-1.64%-0.28%-0.46%-0.46%1.05%0.36%0.50%
CHF-2.15%-0.82%-0.98%-0.94%0.54%-0.16%-0.50%

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

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

More from Haresh Menghani
Share:

Editor's Picks

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress
The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.