USDJPY: Sideways phase before the next move

The USD/JPY currency pair is demonstrating a bullish trend continuation, even in the face of potential intervention risks and short-term pullbacks. It remains firmly positioned near the significant psychological level of 160, which suggests strength in the current trend.

Fundamental Outlook

Fundamentally, the Japanese yen remains under pressure against the US dollar as the Bank of Japan (BoJ) faces challenges in raising rates amid rising oil prices and strong US CPI data. This keeps the interest rate differential between the two countries wide. The next BoJ monetary policy meeting is scheduled for April 27–28, 2026, with markets pricing in roughly a 60% chance of a rate hike on April 28.

The market has moved into a sideways consolidation after hitting the critical supply zone around 160 in March. The pair fell to about 158 last week as the yen appreciated on better risk sentiment in the wake of the ceasefire announcement. Fears of intervention, as Japanese officials cautioned against currency weakness, and prospects of a near-term BoJ rate hike also helped the yen. However, USD/JPY found support above 158 after this decline and recovered into a consolidation zone, indicating a balance between supply and demand while traders consider their next course of action.

Technical Forecast

Currently, USD/JPY is trading just below the critical resistance level of 160, a barrier it has tested multiple times without breaking. As of now, the pair is near 159.00. While the price remains under this resistance, upward momentum remains limited. On the downside, the key support zone lies between 157.40 and 157. A break below this support would likely signal a continuation of the downward trend. Until then, the pair is expected to remain range-bound.

Bottom Line: Despite short-term risks, USD/JPY retains strong potential for gains. A decisive rally above resistance between 160.00 and 160.30 could trigger a surge toward 161 and 161.30. On the downside, ​​sellers should look out for any move back below 157.00.

 

Warning! This material is not intended as investment advice. Past performance data does not guarantee future returns. Investing in foreign currencies may affect your returns due to their fluctuations. Any transaction in securities may result in both profits and losses. The assumptions and expectations set forth in this material are only estimates that may not be accurate and may change depending on current economic conditions. These statements do not guarantee future returns.