USD/JPY Price Forecast: Traders appear cautious below 158.00 ahead of US NFP

• Continued USD buying helps USD/JPY edge higher from its weekly low.
• USD/JPY gains remain limited ahead of US NFP as the hawkish BoJ and intervention risks underpin the JPY.
• With trading still confined to a range, caution is warranted before taking a firm directional position.

The closely watched US Nonfarm Payrolls (NFP) report is the next focus for traders seeking a catalyst ahead of the weekend. Before its release, USD/JPY is trading below 158.00 in Friday’s early European session, struggling to extend an intraday rebound from the weekly low reached earlier in the day.

Expectations of a December increase in borrowing costs by the US Federal Reserve (Fed), together with continuing geopolitical uncertainty, are supporting further US Dollar (USD) gains. The currency is extending the previous day’s rebound from its lowest level since late September, lending support to USD/JPY. The pair’s advance remains constrained, however, as the Bank of Japan’s (BoJ) hawkish stance and the risk of intervention help protect the Japanese Yen (JPY) from steeper losses.

The near-term technical outlook remains bearish, with spot prices trading below both the 100-day Simple Moving Average (SMA) at 159.09 and the 50.0% Fibonacci retracement at 158.44. At 49.37, the Relative Strength Index (RSI) is broadly neutral, offering little counterweight to that negative bias. A flattening Moving Average Convergence Divergence (MACD) histogram just above zero points more towards fading bearish momentum than a clear recovery.

Trading has also remained within a range for roughly seven weeks. That pattern argues for waiting until prices break decisively in either direction before assessing USD/JPY’s near-term path. Any advance would first encounter resistance at the 50.0% retracement of 158.44, with the 100-day SMA at 159.09 and the 61.8% retracement at 159.76 next in line. Further up, the 78.6% level at 161.65 and the cycle high near 164.05 provide a broader ceiling.

Initial support lies at 157.12, the 38.2% Fibonacci retracement, followed by the trading range’s lower boundary around 156.65. Should selling pressure return, the 23.6% retracement at 155.48 could become a more distant downside target before USD/JPY eventually falls towards the cycle low around 152.83.

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

USD/JPY: daily price chart