USD/JPY Pauses Near Highs Before BoJ and Tariff Updates

Key Moments

Price Action Near Multi-Month Range Ceiling

USD/JPY is currently hovering close to 157.90, a level that had capped a multi-month trading corridor established since mid-November and was decisively broken early last week. After reaching a one-and-a-half-year peak near 159.15 last week, the pair has been consolidating, giving back some gains but holding near the recently cleared range top.

This consolidation phase reflects a balanced backdrop, as Trump’s tariff threats against European nations continue to exert pressure on the dollar, while the yen faces its own headwinds from domestic fiscal concerns and anticipation surrounding this week’s Bank of Japan monetary policy announcement.

A sell-off in JGBs weakens the yen as fiscal loosening concerns drive yields higher. USDJPY briefly retested 157.50 before rebounding above 158.20. The price remains above the ascending trendline and both EMAs. Sustaining above 158.20 may prompt a run toward 159.00. pic.twitter.com/ziCcCSTrCF

— Exness (@EXNESS) January 21, 2026

Key Technical Levels in Focus

A move back inside the former trading band would reinforce a neutral technical stance. In such a scenario, attention would likely center on the 20-day and 50-day simple moving averages (SMAs) at 157.28 and 156.37, respectively. Below those levels, the mid-December lows around 155.60 would come into view, followed by the former range floor at 154.30.

If instead the pair manages to push above the current short-term sideways channel, it would strengthen the longer-term bullish structure. That would pave the way for another challenge of the recent high near 159.15, ahead of the next resistance level at the September 26 swing high of 160.20. Above that, the 38-year high at 161.94, set in July 2024, stands out as a major resistance zone that could halt or at least slow any further advance.

Momentum Signals Turn More Cautious

Short-term momentum readings are signaling a loss of upside strength. The MACD indicator remains in positive territory but has edged slightly below its red signal line, while the RSI is retreating yet still holding above the neutral 50 mark. Together, these signals point to waning bullish momentum and support a more patient, wait-and-see approach.

Outlook: Neutral Bias Ahead of Key Catalysts

From a broader perspective, USD/JPY is maintaining a neutral outlook for now, consolidating ahead of important catalysts on both the U.S. dollar and Japanese yen sides this week. Preserving levels above the former range ceiling around 157.90 is seen as crucial for keeping the wider uptrend intact, while a return into the previous range would underscore a more balanced, range-bound environment.