USD/JPY Price Forecast: Tests 160.50 as RSI backs rally, intervention risks loom

USD/JPY Price Forecast: Technical outlook

The USD/JPY has bounced off 159.50 since last week, but it has failed to gain traction amid investor fears of a potential Japanese FX market intervention. From a momentum standpoint, the uptrend should continue as the Relative Strength Index (RSI) is bullish.

Worth noting that the Bank of Japan (BoJ) raised interest rates on Tuesday by 25 basis points to 1% as expected, but the Yen failed to appreciate due to an improvement in risk appetite.

On the upside, the first resistance for USD/JPY is 160.50. A breach of the latter will expose the year-to-date (YTD) high of 160.73 ahead of the 161.00 milestone.

Conversely, if USD/JPY dives below 160.00, the first support would be psychological 159.50, ahead of challenging the 50-day Simple Moving Average (SMA) at 159.00. Below this level, the next support is the 100-day SMA at 158.02.

USD/JPY Price Chart – Daily

Japanese Yen Price Today

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

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.15%	-0.08%	0.06%	0.03%	0.10%	-0.14%	-0.18%
EUR	0.15%		0.09%	0.26%	0.20%	0.24%	0.01%	-0.02%
GBP	0.08%	-0.09%		0.17%	0.13%	0.16%	-0.06%	-0.09%
JPY	-0.06%	-0.26%	-0.17%		-0.06%	-0.01%	-0.19%	-0.25%
CAD	-0.03%	-0.20%	-0.13%	0.06%		0.05%	-0.17%	-0.22%
AUD	-0.10%	-0.24%	-0.16%	0.01%	-0.05%		-0.22%	-0.25%
NZD	0.14%	-0.01%	0.06%	0.19%	0.17%	0.22%		-0.04%
CHF	0.18%	0.02%	0.09%	0.25%	0.22%	0.25%	0.04%

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).

Japanese Yen FAQs

What key factors drive the Japanese Yen?

The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

How do the decisions of the Bank of Japan impact the Japanese Yen?

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

How does the differential between Japanese and US bond yields impact the Japanese Yen?

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

How does broader risk sentiment impact the Japanese Yen?

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.