|

USD/JPY Price Forecast: Holds steady above 157.50 as bulls await 50-hour EMA breakout

  • USD/JPY attracts some sellers on Wednesday, though the downside potential remains limited.
  • Fiscal worries and the US-Japan rate differential cap JPY, limiting losses despite a soft USD.
  • A move beyond the 50-hour EMA is needed to back the case for any meaningful appreciation.

The USD/JPY pair drifts lower during the Asian session on Wednesday and, for now, seems to have stalled this week's goodish recovery from the 155.25-155.20 region, or the lowest since May. Spot prices, however, rebound from the daily low and currently trade just above mid-157.00s, down less than 0.10% for the day.

Japan's real wages grew for the sixth straight month in June, which, along with hawkish Bank of Japan (BoJ) Minutes, provides a modest lift to the Japanese Yen (JPY). Meanwhile, oil prices languish near a multi-week low amid hopes for a US-Iran peace deal, easing inflation fears and tempering US Federal Reserve (Fed) rate hike bets. This, in turn, weighs on the US Dollar (USD) and exerts some pressure on the USD/JPY pair.

However, concerns about Japan's worsening fiscal condition and the wide US-Japan rate differential hold back JPY bulls from placing aggressive bets. Furthermore, traders are still pricing in a greater chance that the US central bank will raise borrowing costs in 2026, which limits USD losses and lends some support to the USD/JPY pair. Traders also seem hesitant ahead of the crucial US Nonfarm Payrolls (NFP) report, due on Friday.

From a technical perspective, spot prices keep the near-term bias slightly bearish while below the 50-period Exponential Moving Average (EMA) on the 4-hour chart. The 14-period Relative Strength Index (RSI) hovers around the neutral 50 line, and Moving Average Convergence Divergence (MACD) has slipped marginally below zero with a flat histogram, hinting at fading upside momentum rather than an outright trend acceleration.

The 50-period EMA on the 4-hour chart at 157.80 might continue to act as an immediate hurdle, while the 38.2% Fibonacci level of the intervention-led downfall, at 158.53, forms the next barrier. This is followed by 159.56 at the 50% retracement and 160.59 at the 61.8% level. On the downside, initial support emerges at the 23.6% Fibo. level at 157.25, and a break below this would expose the more distant structural base around the 155.19 cycle low.

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

USD/JPY 4-hour chart

Chart Analysis USD/JPY

Japanese Yen Price Last 7 Days

The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies last 7 days. Japanese Yen was the strongest against the Canadian Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD-1.25%-1.19%-3.67%-0.22%-1.01%-1.43%-1.23%
EUR1.25%0.07%-2.55%1.02%0.30%-0.18%0.02%
GBP1.19%-0.07%-2.59%0.98%0.24%-0.27%-0.04%
JPY3.67%2.55%2.59%3.68%2.88%2.00%2.54%
CAD0.22%-1.02%-0.98%-3.68%-0.77%-1.61%-1.11%
AUD1.01%-0.30%-0.24%-2.88%0.77%-0.48%-0.29%
NZD1.43%0.18%0.27%-2.00%1.61%0.48%0.20%
CHF1.23%-0.02%0.04%-2.54%1.11%0.29%-0.20%

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 reclaims 0.7000 as blue wave sweep tumbles the US Dollar

The Democratic blue sweep in the US midterm elections weighed on the US Dollar and boosted the Australian Dollar, which has bounced from a 12-day low of 0.6954 and reclaimed 0.7000, gaining over 0.59% at the time of writing.

USD/JPY declines below 158.00 as USD weakens on midterm election results

USD/JPY comes under heavy selling pressure on Wednesday, dropping below 158.00 during the Asian session as the US Dollar slumps to a one-month low amid heightened political uncertainty after early US midterm vote counts. Moreover, the prospect of gridlock in Washington drives safe-haven flows, triggering a fresh leg down in US bond yields and further weighing on the buck.

Gold pops to four-day highs near $4,050

Gold manages to regain some composure, leaving behind two consecutive daily pullbacks and reclaiming the area above the key $4,000 mark per troy ounce on Wednesday. The strong decline in the US Dollar, shrinking US Treasury yields across the curve and lower crude oil price all contributes to the yellow metal’s recovery.

Circle reserve income falls 8% as ARC presale lifts Q3 revenue
Circle (CRCL) reported increased revenue in its Q3 earnings update on Wednesday as the $182 million ARC token presale offset the decline in reserve income. The stablecoin issuer stated that total revenue and reserve income reached $865 million in Q3, up 17% from a year earlier. Net income from continuing operations increased 5% to $226 million, while adjusted EBITDA climbed 85% to $317 million.
US midterms 2026: Investor Q&A on the Democratic sweep
1. Gridlock replaces the stimulus narrative. A Democratic Congress would constrain Trump's ability to pursue additional fiscal expansion and legislative tax measures. But it cannot simply reverse the president's entire economic agenda. Executive powers, existing legislation and presidential vetoes remain important. 2. AI faces a higher hurdle, not an extinction event.
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.