USD/JPY Price Forecast: Extends recovery to near 155.30 as US Dollar gains

US Dollar Price Today

The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Japanese Yen.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.16%	0.08%	0.37%	0.05%	-0.02%	-0.04%	0.27%
EUR	-0.16%		-0.08%	0.22%	-0.12%	-0.18%	-0.20%	0.11%
GBP	-0.08%	0.08%		0.29%	-0.05%	-0.10%	-0.12%	0.18%
JPY	-0.37%	-0.22%	-0.29%		-0.33%	-0.39%	-0.41%	-0.10%
CAD	-0.05%	0.12%	0.05%	0.33%		-0.05%	-0.07%	0.23%
AUD	0.02%	0.18%	0.10%	0.39%	0.05%		-0.02%	0.29%
NZD	0.04%	0.20%	0.12%	0.41%	0.07%	0.02%		0.30%
CHF	-0.27%	-0.11%	-0.18%	0.10%	-0.23%	-0.29%	-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 US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).

At the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.2% higher to near 97.90.

On Monday, President Donald Trump warned of steeper tariffs against countries “playing games with existing trade agreements” after the Supreme Court’s (SC) verdict. Last week, the US SC ruled against tariffs invoked by President Donald Trump under the International Emergency Economic Powers Act (IEEPA).

Meanwhile, the Japanese Yen (JPY) underperforms its major peers despite Nikkei newspaper reporting earlier in the day that US authorities took the initiative in conducting January "rate checks" to prop up the yen and were ready to conduct joint intervention on Japan’s request, Reuters reports.

USD/JPY technical analysis

USD/JPY jumps higher to near 155.30 in the Asian trade on Tuesday. The broader outlook of the pair is sideways amid a Descending Triangle formation, which indicates a sharp volatility contraction. The downside of the pair is supported by the horizontal border of the above-mentioned pattern around 152.00, while the descending border from the January 23 high at 159.66 limits gains, with resistance marked at 156.01.

The 20-day Exponential Moving Average (EMA) at 154.91 is flattening after a prior downswing, and price holds above it. A sustained close above this average would keep the recovery path intact.

The 14-day Relative Strength Index (RSI) remains confined inside the 40.00-60.00 range, indicating a sideways trend.

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

US Dollar FAQs

What is the US Dollar?

The US Dollar (USD) is the official currency of the United States of America, and the ‘de facto’ currency of a significant number of other countries where it is found in circulation alongside local notes. It is the most heavily traded currency in the world, accounting for over 88% of all global foreign exchange turnover, or an average of $6.6 trillion in transactions per day, according to data from 2022. Following the second world war, the USD took over from the British Pound as the world’s reserve currency. For most of its history, the US Dollar was backed by Gold, until the Bretton Woods Agreement in 1971 when the Gold Standard went away.

How do the decisions of the Federal Reserve impact the US Dollar?

The most important single factor impacting on the value of the US Dollar is monetary policy, which is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability (control inflation) and foster full employment. Its primary tool to achieve these two goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, the Fed will raise rates, which helps the USD value. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates, which weighs on the Greenback.

What is Quantitative Easing and how does it influence the US Dollar?

In extreme situations, the Federal Reserve can also print more Dollars and enact quantitative easing (QE). QE is the process by which the Fed substantially increases the flow of credit in a stuck financial system. It is a non-standard policy measure used when credit has dried up because banks will not lend to each other (out of the fear of counterparty default). It is a last resort when simply lowering interest rates is unlikely to achieve the necessary result. It was the Fed’s weapon of choice to combat the credit crunch that occurred during the Great Financial Crisis in 2008. It involves the Fed printing more Dollars and using them to buy US government bonds predominantly from financial institutions. QE usually leads to a weaker US Dollar.

What is Quantitative Tightening and how does it influence the US Dollar?

Quantitative tightening (QT) is the reverse process whereby the Federal Reserve stops buying bonds from financial institutions and does not reinvest the principal from the bonds it holds maturing in new purchases. It is usually positive for the US Dollar.