USD/JPY Price Forecast: Sits near late July high; bulls retain control above 160.00
- USD/JPY consolidates near its highest level since late July, set earlier this Wednesday.
- Japan’s fiscal woes and the rate gap undermine the JPY, lending support amid a firmer USD.
- The bullish technical setup backs the case for an extension of a one-month-old uptrend.
The USD/JPY pair touches a fresh high since July 31 on Wednesday, though it lacks follow-through buying and remains below 160.50 through the Asian session.
The Japanese Yen (JPY) continues its relative underperformance on the back of fiscal concerns stemming from a surge in bond yields, which increases the cost of servicing Japan's massive debt pile. The US Dollar (USD), on the other hand, climbs to a nearly three-week top as oil-driven inflation fears reaffirm bets for a September interest rate hike by the Federal Reserve (Fed) amid escalating US-Iran tensions.
Furthermore, the persistent wide US-Japan interest rate differential keeps the so-called JPY carry trade active and backs the case for a further near-term appreciating move for the USD/JPY pair. However, expectations for faster policy tightening by the Bank of Japan (BoJ) cap the upside as traders await the release of the US Nonfarm Payrolls (NFP) report on Friday.
From a technical perspective, momentum indicators remain constructive, with the Relative Strength Index (RSI) hovering in the mid-60s and the Moving Average Convergence Divergence (MACD) line holding slightly positive. This hints that buyers retain control and suggests that the underlying demand is still present despite the recent consolidation. The USD/JPY pair is looking to build on its strength beyond the 200-period Simple Moving Average (SMA) on the 4-hour chart.
Meanwhile, the 61.8% Fibonacci retracement level of the sharp corrective decline from a four-decade high, at 160.64, could act as the first notable topside barrier, capping immediate upside. A clear break above would open the way toward the 78.6% level at 162.10, with the July swing high around 163.96 standing as a more distant resistance, where bullish pressure could begin to fade.
On the downside, initial support aligns at the 50.0% Fibo. retracement at 159.62, creating a cushioning zone if the USD/JPY pair pulls back. A deeper slide would expose subsequent supports at the 38.2% retracement around 158.59 and then the 23.6% Fibo. level near 157.32.
(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 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 New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.24% | -0.04% | 1.91% | -0.66% | -1.35% | 1.08% | 0.80% | |
| EUR | 0.24% | 0.22% | 2.21% | -0.37% | -1.01% | 1.35% | 1.05% | |
| GBP | 0.04% | -0.22% | 1.62% | -0.62% | -1.23% | 1.13% | 0.83% | |
| JPY | -1.91% | -2.21% | -1.62% | -2.45% | -3.06% | -0.69% | -1.00% | |
| CAD | 0.66% | 0.37% | 0.62% | 2.45% | -0.61% | 1.81% | 1.46% | |
| AUD | 1.35% | 1.01% | 1.23% | 3.06% | 0.61% | 2.38% | 2.09% | |
| NZD | -1.08% | -1.35% | -1.13% | 0.69% | -1.81% | -2.38% | -0.30% | |
| CHF | -0.80% | -1.05% | -0.83% | 1.00% | -1.46% | -2.09% | 0.30% |
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.
