USD/JPY Price Forecast: Rallies and reclaims 150.00, bulls eye key resistance
- USD/JPY needs to clear 150.93 to invalidate the broader downtrend.
- Key resistance at 151.00 and Senkou Span A at 151.50.
- Failure to hold 150.00 could push the pair toward 148.57 support.
The USD/JPY rallied for the third straight day after bottoming near 148.60 on Tuesday. It gained over 0.54% and traded back above the 150.00 handle. At the time of writing, the pair is trading at 150.59.
USD/JPY Price Forecast: Technical outlook
The USD/JPY pair's downtrend will remain in place unless buyers reclaim 150.93, the February 7 daily low that turned resistance. The Tenkan-sen at 150.44 was already reclaimed, but key resistance levels reaffirm the USD/JPY bearish scenario.
Bulls must reclaim 151.00 ahead of challenging the Senkou Span A at 151.50. On further strength, up next lies the 200-day Simple Moving Average at 152.43
Conversely, if USD/JPY drops below 150.00, the next support would be the February 25 daily low of 148.57. Once hurdled, the next support would be the December 2024 swing low of 148.64.
USD/JPY Price Chart – Daily
Japanese Yen FAQs
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.
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.
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.
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.