Key Moments
- USD/JPY traded around 155.45-155.50, marking a one-week high but showing limited follow-through buying.
- Markets expected a 25 bps Fed rate increase and closely watched updated projections and Chair Kevin Warsh’s comments.
- Traders priced in a 25 bps BoJ hike on Friday with increased expectations for another move in December, tempering further yen weakness.
Dollar-Yen Steadies After Touching One-Week High
The USD/JPY pair extended its advance for a third consecutive session during Asian trading on Wednesday, briefly reaching a one-week high in the 155.45-155.50 area. After that move, buying interest faded as participants grew cautious ahead of major central bank announcements.
Fed Decision in Focus for Dollar Direction
The US Federal Reserve was set to conclude its September policy meeting, with market participants broadly anticipating a 25 basis point rate increase. Attention centered on the Fed’s updated economic projections, including the dot plot, as well as Chair Kevin Warsh’s comments at the post-meeting press conference, for clarity on the potential path of future policy. These signals were expected to be a key driver for the US Dollar and, by extension, for USD/JPY.
BoJ Repricing Limits Deeper Yen Losses
Despite the dollar’s strength, the immediate impact on USD/JPY appeared constrained by a more hawkish repricing of the Bank of Japan’s policy outlook. Market pricing indicated expectations for a 25 bps rate hike at the conclusion of the BoJ’s two-day meeting on Friday, along with an increased perceived likelihood of another move in December. This backdrop discouraged aggressive selling of the Japanese Yen and helped cap any significant additional upside in the pair.
Bond Yields, Inflation Concerns Support the Greenback
Investor concerns about energy-related inflation pressures continued to support expectations for further Fed tightening. At the same time, increased public and corporate borrowing contributed to an extended global bond selloff. As a result, the yield on the benchmark 10-year US Treasury note moved above the 5% level for the first time since 2023, reaching its highest reading since 2007. Together with ongoing geopolitical risks, these dynamics underpinned the Greenback and provided a supportive backdrop for USD/JPY.
Technical Picture: Bullish Structure Intact
On the technical front, USD/JPY remained comfortably above the 23.6% Fibonacci retracement, preserving a constructive intraday bullish setup. The 38.2% Fibonacci retracement at 155.65 represented the first notable resistance, while the 50% retracement at 156.55 and the 100-period Simple Moving Average on the 4-hour chart at 156.81 together defined a broader supply zone on the upside.
On the downside, initial support was identified near the 23.6% retracement around 154.54. A more substantial downside move toward the Fibonacci anchor close to 152.75 would be required to meaningfully challenge the prevailing bullish structure on the 4-hour timeframe.
(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 summarizes weekly percentage changes for the Japanese Yen versus major peers. Over this period, the yen showed its strongest performance against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.48% | 0.33% | 1.13% | 0.43% | 0.48% | 1.23% | 0.32% | |
| EUR | -0.48% | -0.16% | 0.65% | -0.05% | 0.01% | 0.75% | -0.17% | |
| GBP | -0.33% | 0.16% | 0.84% | 0.11% | 0.17% | 0.92% | -0.03% | |
| JPY | -1.13% | -0.65% | -0.84% | -0.70% | -0.69% | 0.04% | -0.84% | |
| CAD | -0.43% | 0.05% | -0.11% | 0.70% | 0.08% | 0.80% | -0.15% | |
| AUD | -0.48% | -0.01% | -0.17% | 0.69% | -0.08% | 0.75% | -0.18% | |
| NZD | -1.23% | -0.75% | -0.92% | -0.04% | -0.80% | -0.75% | -0.94% | |
| CHF | -0.32% | 0.17% | 0.03% | 0.84% | 0.15% | 0.18% | 0.94% |
The heat map shows percentage changes between major currencies. The base currency is taken from the left column and the quote currency from the top row. For example, selecting the Japanese Yen as the base on the left and moving across to the US Dollar column shows the percentage change for JPY (base)/USD (quote).
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
