USD/JPY Price Forecast: Hovers near previous intervention levels at around 160.50

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The USD/JPY pair trades flat at around 160.50 during the European trading session on Thursday. The pair consolidates amid caution that Tokyo could intervene in forex markets to support the Japanese Yen (JPY).

USD/JPY flattens at around 160.50 while investors expect Japan’s intervention soon.
The BoJ is expected to raise interest rates by 25 bps to 1% on Tuesday.
Investors seek fresh cues on whether the US-Iran ceasefire remains intact.

Japan’s intervention prospects have intensified as the pair has reached levels prior to when the government intervened against one-way excessive moves in the domestic currency.

Meanwhile, uncertainty surrounding the Bank of Japan’s (BoJ) interest rate decision, which will be announced on Tuesday, has also pushed investors to the sidelines. According to the latest Reuters poll, the BoJ is expected to raise interest rates by 25 basis points (bps) to 1%.

At press time, the US Dollar Index (DXY) trades 0.13% lower to near 99.95, with investors seeking cues on whether the April ceasefire between the United States (US) and Iran is intact. In the last few days, the US Central Command (CENTCOM) conducted military operations on various targets in Iran in retaliation for Tehran’s attacks on a US Apache helicopter patrolling over the Strait of Hormuz.

USD/JPY technical analysis

USD/JPY trades flat at around 160.50 at press time. The pair holds a clear bullish near-term bias as spot remains above the 20-day exponential moving average (EMA) at 159.64, keeping the recent advance technically supported.

The Relative Strength Index (RSI) around 65 suggests firm upward momentum but not yet extreme overbought conditions, allowing room for further gains while the price action stays anchored above the short-term EMA.

On the downside, immediate support is defined by the 20-day EMA at 159.64, where a daily close below would hint at a deeper corrective phase toward prior lows. Looking up, the pair would extend its advance towards the 3 July 2024 high at 161.95 if it manages to decisively break above the April 30 high at 160.73.

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

Economic Indicator

BoJ Interest Rate Decision

The Bank of Japan (BoJ) announces its interest rate decision after each of the Bank’s eight scheduled annual meetings. Generally, if the BoJ is hawkish about the inflationary outlook of the economy and raises interest rates it is bullish for the Japanese Yen (JPY). Likewise, if the BoJ has a dovish view on the Japanese economy and keeps interest rates unchanged, or cuts them, it is usually bearish for JPY.