Key Moments
- USD/JPY falls for a second consecutive session to a nearly four-week low around the 157.25-157.20 area in early European trade on Thursday.
- Speculation over official rate checks and firmer Bank of Japan rate hike expectations bolster the Yen, while a broadly weaker Dollar adds to downside pressure.
- Bearish technical signals point to potential tests of support at 157.00, 156.60-156.50, and possibly the August swing low near 155.25-155.20.
Downside Momentum Intensifies
USD/JPY remains under heavy selling pressure for the second straight session, sliding to a nearly four-week trough in early European trading on Thursday. The pair drops into the 157.25-157.20 zone as sellers continue to dominate price action.
Market participants stay vigilant amid speculation that authorities have carried out a rate check, which is viewed as a signal that direct intervention to bolster the Japanese Yen (JPY) may be on the table. At the same time, a more hawkish repricing of Bank of Japan (BoJ) rate hike expectations is providing additional support to the JPY. This combination, together with broad softness in the US Dollar (USD), is weighing further on USD/JPY.
Technical Setup Favors Further Weakness
From a chart perspective, Wednesday’s failure to break above the 200-period Simple Moving Average (SMA) on the 4-hour timeframe, followed by renewed selling, reinforces the bearish outlook. The Moving Average Convergence Divergence (MACD) indicator is in negative territory, while the Relative Strength Index (RSI) has dropped into oversold levels, indicating that downside pressure on the pair remains intact.
Given this backdrop, an extension of the decline below the 157.00 handle appears plausible, opening the door for a move toward horizontal support in the 156.60-156.50 band. Should selling persist, the bearish trajectory could stretch further toward the August swing low near the 155.25-155.20 region, with intermediate support seen around the 156.00 round figure.
Key Resistance Levels on Any Rebound
On the upside, any attempt at a corrective bounce is expected to face selling interest around 158.00. That zone is projected to limit recoveries and keep the pair capped near the 158.40-158.50 pivotal resistance area. A sustained push above that region could encourage additional momentum toward the 159.00 level and then toward the 200-period SMA, located close to the 160.00 psychological barrier.
A clear break and acceptance above the 160.00 area would be required to alleviate the current bearish tone and indicate the potential for a more durable recovery in USD/JPY.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Japanese Yen Performance Against Major Currencies This Week
The table below presents this week’s percentage changes of the Japanese Yen (JPY) relative to major currencies. Over the period, the JPY shows its strongest performance against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | — | -0.20% | 0.33% | -1.73% | -0.60% | -0.09% | 1.17% | 0.16% |
| EUR | 0.20% | — | 0.53% | -1.52% | -0.41% | 0.10% | 1.32% | 0.38% |
| GBP | -0.33% | -0.53% | — | -2.14% | -0.93% | -0.43% | 0.79% | -0.24% |
| JPY | 1.73% | 1.52% | 2.14% | — | 1.07% | 1.66% | 2.83% | 1.82% |
| CAD | 0.60% | 0.41% | 0.93% | -1.07% | — | 0.52% | 1.75% | 0.70% |
| AUD | 0.09% | -0.10% | 0.43% | -1.66% | -0.52% | — | 1.22% | 0.19% |
| NZD | -1.17% | -1.32% | -0.79% | -2.83% | -1.75% | -1.22% | — | -1.02% |
| CHF | -0.16% | -0.38% | 0.24% | -1.82% | -0.70% | -0.19% | 1.02% | — |
The associated heat map measures percentage moves between major currency pairs. The base currency is taken from the left-hand column and the quote currency from the top row. For instance, selecting the Japanese Yen as the base on the left and moving horizontally to the US Dollar cell shows the percentage change for JPY (base)/USD (quote).
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