USD/JPY Price Forecast: 153–155 Range Tested as Policy Risks Build

USD/JPY – price, range and current pulse around 153–155

USD/JPY is sitting in a tight pocket after the post-election slide, oscillating roughly between 152.00 and 154.70–155.00. Spot has been quoted around 153.5–154.5, up roughly 0.3–0.8% on the day in several sessions as the dollar finds short-term support from firm US data while the yen is hit by talk of a wider fiscal deficit. The pair briefly pushed toward 154.48 and 153.70 in recent trading and then faded, confirming that the market is comfortable treating this zone as consolidation rather than a fresh breakout. Volatility has notably cooled as the Bollinger Bands narrow and price holds near the mid-band, showing a market that is waiting for the next policy catalyst rather than chasing trend.

USD/JPY – dollar side driven by resilient US data and FOMC minutes

On the dollar leg, the push higher in USD/JPY is backed by resilient US conditions rather than a classic risk-off spike. Recent US releases have stayed firm enough to keep the Federal Reserve cautious on cutting too early, even after inflation cooled. Headline CPI eased from 2.7% to 2.4% and core from 2.6% to 2.5%, yet the strong jobs report that followed forced rate-cut expectations lower, with the implied probability of a June cut dropping from roughly three-quarters to the low-60s in percentage terms. That repricing supports the dollar and prevents an aggressive unwind of carry. The upcoming FOMC minutes are critical because any emphasis on persistent inflation risks over growth worries would keep the front end of the US curve elevated, cap the downside in USD/JPY near 152.00, and delay the deeper correction yen-bulls are waiting for. A more dovish tone would flip the script and re-ignite talk of multiple cuts in 2026, putting pressure on the dollar leg of the pair.

USD/JPY – Japanese growth, exports and fiscal stance reshape the yen story

The yen side of USD/JPY is no longer just about ultra-loose policy; it now reflects a shifting macro mix. Flash Q4 GDP printed at 0.1% quarter-over-quarter versus expectations of 0.4%, a clear miss but a return to growth after a 0.7% contraction in the previous quarter. That weak headline has accelerated speculation that Prime Minister Sanae Takaichi will push through larger fiscal packages in the coming budget, widening the deficit and, in theory, eroding currency appeal. At the same time, January trade data sent a very different signal: exports jumped 16.8% year-over-year after 5.1% in December, while imports fell 2.5% after a 5.3% gain. Exports to China surged about 32% against just 5.5% previously, and exports to the US still contracted 5.0% after an 11.1% fall, consistent with the Bank of Japan’s assessment that tariff headwinds from the US have eased. Stronger external demand, higher pricing power and the prospect of better wage dynamics all strengthen the case for an April BoJ hike and a slow grind away from negative real rates, which supports the yen on a multi-month horizon even if fiscal headlines temporarily weigh on sentiment.

USD/JPY – BoJ normalization, JGB yields and the rate-differential path

The core medium-term driver for USD/JPY remains the spread between US and Japanese yields and how quickly that gap can narrow. Ten-year Japanese Government Bond yields have slipped back toward the lowest levels since mid-January, easing fears that Takaichi’s fiscal push will trigger a destabilizing spike in funding costs and helping risk premiums compress. That move by itself is not yet yen-positive, but when combined with rising expectations for an April rate hike, it points to a BoJ that is more comfortable steadily normalizing policy rather than staying locked at the floor. Markets now see room for roughly 60 basis points of tightening over the year from the BoJ, while the Fed is expected to cut, even if the exact timing remains in flux. A path where Japan edges up toward a neutral rate and the Fed trims from restrictive levels will keep the structural pressure on USD/JPY tilted lower over six to twelve months, particularly if wage negotiations confirm a sustained inflation pulse above the BoJ’s 2% objective.

USD/JPY – intervention watch-zone between 157 and 160 and top-side limits

The political ceiling for USD/JPY has not moved. Large banks continue to flag 157–160 as the intervention watch-zone where authorities are most likely to step in. That range is high enough to keep carry strategies attractive but close enough to current levels to cap how aggressive any bullish view can be. Even with the dollar supported and the yen weighed down by fiscal talk, the threat of official selling limits speculative appetite to push meaningfully beyond the mid-150s. Institutions still see structural yen-selling flows in the system, but they acknowledge that verbal warnings and the risk of real intervention will keep upside contained. This creates a skewed risk profile: rallies toward the upper 150s carry a growing probability of abrupt downside shocks from policy action, while dips towards 150–152 are more likely to attract medium-term buyers who want exposure to a stronger yen once normalization and Fed cuts are fully priced.

USD/JPY – corporate hedging flows and the 152 handle as tactical pivot

Domestic corporate behavior is reinforcing this banded environment for USD/JPY. Below roughly 152, current spot levels are seen as attractive for Japanese firms to add yen-buying hedges against future foreign income. That hedging demand supports the currency on weakness and helps defend the floor around 150–152, especially as the fiscal year end approaches. In practice, this flow means that each drop below 152 tends to encounter real-money buying rather than just speculative positioning, reducing follow-through unless macro shocks or a clear shift in Fed or BoJ rhetoric coincide. On the flip side, those same corporates are less inclined to chase hedging at 155–158, which removes a natural buyer at the highs and leaves speculative longs more exposed to reversals if intervention chatter intensifies or US data disappoints.

USD/JPY – daily chart structure, Bollinger mid-band and moving averages

Technically, USD/JPY has transitioned from a vertical move to a paused structure that is still vulnerable to a break lower. Price is oscillating just under the 20-day moving average around 154.7, which coincides with the middle Bollinger band, acting as immediate resistance. The upper band sits near 158.1, marking the potential extension zone if the pair clears 155.00 with momentum. On the downside, the lower band is clustered around the low-151s, near 151.3, aligning with the first key support area ahead of the psychological 150.00 handle. Momentum indicators confirm the loss of directional conviction: the Relative Strength Index has crawled from the low-40s toward the mid-40s, still neutral but gently recovering from prior weakness, while the Average Directional Index around 23 signals only modest trend strength. The picture is a pair carving out a range with a slightly downward bias rather than a clean bullish continuation.

USD/JPY – key horizontal levels, downside risk to 150 and 145, and what breaks the range

The level map for USD/JPY is now clear. On the upside, 154.70–155.00 is the first resistance band; a sustained daily close above it would open 157.60–158.00, where the upper Bollinger band and the early-February high converge. Beyond that lies the politically sensitive 157–160 zone where intervention risks spike. On the downside, 152.00, the late-January low, is the first line of support and a key pivot. A break and close below 152.00 would signal that the market is no longer content with sideways action and is ready to test the 150.00 region. A decisive move under 150.00 would expose the 145.00 area next, consistent with several macro-driven scenarios that envisage narrower rate differentials and unwinds of yen-funded carry positions over the next few quarters. A sustained drop below the longer-term moving averages would confirm that a medium-term top is in place and shift the bias toward a broader yen recovery.

USD/JPY – Fed minutes, CPI, and BoJ communications as near-term catalysts

The next big signals for USD/JPY sit on both sides of the Pacific. On the US side, the FOMC minutes and upcoming Fed commentary will decide whether the market leans back toward an earlier start to easing or doubles down on a slower, data-dependent path. Re-pricing toward an earlier June cut, especially if followed by softer activity data, would undercut the dollar and drag the pair back toward 152.00 and potentially 150.00. On the Japanese side, the January national CPI ex fresh food is expected near 2.0% year-on-year versus 2.4% in December. A print that confirms sticky underlying inflation and firm wage trends would strengthen the argument for an April hike. Any BoJ communication that frames a higher neutral rate band or signals comfort with multiple moves over the next year would reinforce that message and add further downward pressure on USD/JPY once the market looks beyond the immediate fiscal headlines.

USD/JPY – bias, stance and whether this is a buy, sell or hold

Putting the macro and technical picture together, USD/JPY is no longer an easy upside carry play at current levels. The pair is trading below the short-term moving average, volatility is compressing, and the macro backdrop is shifting toward a world where Japanese rates edge higher and US rates edge lower. Fiscal expansion talk in Japan and near-term support from strong US data can still push price toward 155–157, but intervention risk above 157, corporate hedging demand below 152, and rising expectations for an April BoJ hike all argue against chasing the dollar at these levels. On a multi-month horizon the skew favours a stronger yen and a lower USD/JPY, with 150 and then 145 logical downside waypoints if policy and data evolve in line with current expectations. The stance that fits this backdrop is clear: treat USD/JPY as a Sell on strength into the mid-150s with a medium-term target zone around 150–145 and an invalidation only if authorities tolerate a sustained break above the upper-150s and the Fed abandons the easing path.

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