The Japanese Yen has been failing near a daily low against the US Dollar. In early European trading, the USD/JPY pair reaches close to 156.00. Hawkish expectations from the Bank of Japan help keep losses to JPY to some extent due to potential policy tightening and pay hikes support. Meanwhile, renewed US President Donald Trump tariff threats on the varied industries with US Treasury yields rebounding strengthen USD, and JPY is weakly positioned compared with the lower yielding ones. Markets look for guidance with the incoming US macro data along with two days of the FOMC Federal Reserve meet scheduled. USD/JPY charts are technically biased southward and, hence, this pair faces critical resistance in 156.00 and immediate support nearby 155.00.

KEY LOOKOUTS

• Hawkish signals from the Bank of Japan, including continued rate hikes and policy adjustments, could be supportive of the Japanese Yen and limit its losses against the US Dollar.

• Proposed tariffs by President Trump on key industries, including pharmaceuticals and metals, are likely to raise market volatility and impact USD/JPY movements through their influence on inflation and bond yields.

• The Federal Reserve’s policy decisions during its two-day meeting will play a critical role in shaping the USD’s trajectory and the overall direction of the USD/JPY pair.

• Key resistance around 156.00 and support near 155.00 will guide traders, with a break below 154.50 signaling potential further downside for the USD/JPY pair.

The USD/JPY pair remains under focus as the Japanese Yen struggles near daily lows amid diverging monetary policies and global economic uncertainties. Hawkish expectations from the Bank of Japan, including potential rate hikes and policy adjustments, help limit JPY losses despite modest USD strength fueled by rebounding US Treasury yields and President Trump’s renewed tariff threats on various industries. Market participants are eyeing key technical levels, with resistance around 156.00 and support near 155.00, while awaiting critical US macroeconomic data and the outcome of the Federal Reserve’s FOMC meeting. These factors will likely determine the pair’s next directional move in the coming sessions.

The USD/JPY pair hovers near daily lows as rebounding US Treasury yields and Trump’s tariff threats continue to bolster the USD, and hawkish BoJ expectations limit JPY losses. Market participants will watch for further cues from the outcome of the FOMC meeting.

• Japanese Yen fails against US Dollar; pairs are seen nearing 156.00 on back of rebounding US Treasury yields and tariff threats by Trump.

• This kind of sign by the Bank of Japan, including rate hikes and fostering wage growth, caps losses for JPY.

• Fresh tariff threats by President Trump on pharmaceuticals and metals increase volatility in the market and make USD rise.

• Traders are most likely to wait for cues from the monetary policy decision of the Federal Reserve to see what happens with USD and the overall market.

• Durable Goods Orders, Consumer Confidence Index, and the Richmond Manufacturing Index will shed some light on US economic outlook

• Resistance levels are located near 156.00, with the immediate support levels around 155.00 and a break below 154.50 would push the pair towards further losses

• The pair is still under pressure due to differences in policy directions between BoJ and Fed along with global uncertainty.

The USD/JPY pair remains close to daily lows. The Japanese currency is under considerable pressure against the greenback due to diverging monetary policies and surging global economic uncertainties. Positive support for the Yen comes through the hawkish outlook of the Bank of Japan, which implies rate hikes or policy adjustments. However, the US Dollar holds firm as the Treasury yields begin to rebound and President Trump’s threat to impose fresh tariffs on pharmaceuticals and metals may reactivate inflationary forces. Traders are following these reports closely as they create market sentiment and push volatility for the currency pair

USD/JPY Daily Chart

TradingView Prepared by ELLYANA

Focus, meanwhile, would be on crucial US macro data, which is a mix of Durable Goods Orders, the Consumer Confidence Index, and the Richmond Manufacturing Index. Together, they may give clues as to the prospects of the US economy. This will also help determine the trend of the dollar as the Fed concludes its two-day FOMC meeting. On the technical side, resistance for USD/JPY is observed at 156.00, and immediate support is located around 155.00. A strong break below 154.50 would likely mean a continuation of the downside pressure, keeping traders alert for any directional guidance in the following sessions.

TECHNICAL ANALYSIS

USD/JPY is trading within a critical range. Resistance is located near the 156.00 level, which is also aligned with the trend-channel support breakpoint now turned into resistance. The next zone in concert with the supply from 156.60 to 156.70 might cap further movements upwards. Psychologically speaking, the zone between 155.00 on the downside should work as support with the next horizon zone situated from 154.55 down to 154.50, along with the zone for 154.00. Continued breakdown through such levels will definitely reinforce the view of further falling and bring further declines into 153.70 and beyond and potentially 153.30 and perhaps 153.00. Oscillators on the daily chart are showing negative traction and suggesting that USD/JPY’s path of least resistance in the short term could be lower.

FORECAST

The pair might have only limited upside to it as it gets close to some key resistances near 156.00 and the supply zone at 156.60-156.70. Drivers to the upside will include rebounding US Treasury yields and continued US Dollar strength, with President Trump’s tariff policies and inflationary pressures being the biggest culprits. Strong US economic data or a more hawkish tone from the Federal Reserve in the FOMC meeting also could fuel additional demand for USD, pushing the pair higher. However, these gains will likely be capped by the divergent policy expectations between the Bank of Japan and the Federal Reserve.

The USD/JPY pair faces immediate support near the 155.00 psychological level, followed by critical zones at 154.55-154.50 and the 154.00 mark. A break below these levels may signal deeper bearish momentum and push the pair toward the 153.70 region and then to 153.30 or 153.00. Downside risk is reinforced by bearish technical indicators, including oscillators gaining negative traction. Another factor that might weigh on the USD/JPY pair is the market’s focus on the BoJ’s tightening stance and potential macroeconomic pressures in the US, thus increasing the possibility of further declines.