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
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.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.25% | -1.19% | -3.67% | -0.22% | -1.01% | -1.43% | -1.23% | |
| EUR | 1.25% | 0.07% | -2.55% | 1.02% | 0.30% | -0.18% | 0.02% | |
| GBP | 1.19% | -0.07% | -2.59% | 0.98% | 0.24% | -0.27% | -0.04% | |
| JPY | 3.67% | 2.55% | 2.59% | 3.68% | 2.88% | 2.00% | 2.54% | |
| CAD | 0.22% | -1.02% | -0.98% | -3.68% | -0.77% | -1.61% | -1.11% | |
| AUD | 1.01% | -0.30% | -0.24% | -2.88% | 0.77% | -0.48% | -0.29% | |
| NZD | 1.43% | 0.18% | 0.27% | -2.00% | 1.61% | 0.48% | 0.20% | |
| CHF | 1.23% | -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
FXStreet
Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.
