USD/JPY price today and immediate setup
USD/JPY is trading around 156.8–157.0 after four straight sessions pinned just under the 157.00 handle. Price has been holding inside an ascending channel since early December, with higher lows building from roughly 151.7 on the daily chart and from around 155.7–156.3 on intraday charts. The pair has pushed above the 100-hour moving average near 156.5 and trades comfortably above the 200-day band, signalling that the default state is still an uptrend rather than a reversal. The immediate battle is clear: buyers are defending the 156.2–156.3 region, while sellers are leaning near 157.0–157.7 as the next resistance layer.
Yield gap and BoJ policy keep JPY on the back foot
The core driver behind USD/JPY strength is still the interest-rate gap. The Bank of Japan has lifted its policy rate to 0.75% from 0.50%, the second hike in 2025, but the move was wrapped in cautious guidance and no clear roadmap for further tightening. That hesitation keeps Japanese yields far below US yields, even as markets price in Federal Reserve cuts. The message to macro funds is simple: carry on short JPY until Tokyo proves otherwise. At the same time, Japanese officials are openly signalling discomfort. The finance minister has said authorities are watching FX “with a high sense of urgency” and are ready to act against “excessive and one-sided moves.” That intervention risk is the main brake on upside, but so far it has not been enough to force a sustained USD/JPY reversal.
Fed cuts, US data and how they filter into USD/JPY
On the US side, rate-cut expectations are now embedded, but the data flow does not show a collapsing economy. Fed funds futures are discounting more than a 75% chance of a first rate cut by March, and markets are broadly positioned for two cuts this year rather than the single move suggested by a divided FOMC. At the same time, recent numbers show resilience: initial jobless claims dropped to 199k versus a 220k forecast, continuing claims dipped to 1.866 million from 1.913 million, pending home sales jumped 3.3% month-on-month against a 1% consensus, and home-price measures are still rising around 0.4% month-on-month and 1.3% year-on-year. That mix caps the dollar’s upside on a broad basis but keeps US yields elevated enough to support USD/JPY at high levels. Political noise around Fed independence, including pressure for a future Fed chair to keep rates low, adds another layer of uncertainty but has not yet broken the yield advantage the dollar holds over the yen.
Short-term structure: 4-hour and intraday levels for USD/JPY
On the 4-hour chart, USD/JPY trades around 156.8–156.9 inside a rising channel that has been in place since early December. Price is pressing the upper half of that structure, with an ascending trendline offering support near 156.3. Recent candles above 157.0 have been small and indecisive, showing consolidation rather than a clean breakout: price is coiling beneath a descending resistance line near 157.7, which effectively forms a tightening wedge inside the broader uptrend. Key intraday resistance levels stand at 157.0–157.7 first, then 158.6 and 159.25 as the next upside markers. Supports sit at 156.3 on the 4-hour trendline and 155.55 around the 38.2% Fibonacci retracement. Momentum gauges are not yet stretched; the 14-period RSI on intraday frames has pulled back from overbought territory and now sits mid-range, giving room for another leg higher if catalysts line up.
Daily chart: broader USD/JPY trend and upside bands
The daily USD/JPY chart confirms that the pair is still in a clear ascending channel. Price trades above both the 100-day and 200-day moving averages, with the latter well below spot, reinforcing the idea that this is an uptrend pausing, not a topping pattern. The recent rebound from roughly 151.7 has carved out higher lows, and the 14-day RSI has room before hitting classic overbought thresholds. On that longer frame, immediate resistance zones cluster around 159.2 and then 161.8, which line up with the upper band of the current channel. On the downside, 154.4 is the first meaningful daily support, followed by 151.7, where buyers previously stepped in hard. As long as closing prices hold above 154.4, the technical bias on the daily view stays constructive for USD/JPY, with dips more likely to attract demand than mark the start of a structural downtrend.
Event risk: NFP, intervention threat and volatility pockets
Near-term volatility in USD/JPY will be driven by two overlapping risks: US labour data and potential Japanese action. The US Nonfarm Payrolls release next week is the first major macro test of the year. A weak jobs print and softer wage growth would harden expectations for early and deeper Fed cuts, likely pressuring US yields and pulling USD/JPY back toward 156.3 and possibly 155.5. A strong report, by contrast, would validate the resilience already visible in jobless claims and housing, and could push yields higher again, re-energising a push through 157.7 toward 158.6. Running in parallel is the risk of Japanese intervention. Levels around and above the high-150s have historically drawn official pushback when moves looked one-sided. Current communication from Tokyo suggests that authorities will tolerate a gradual grind higher in USD/JPY, but a fast spike through 158–159 with no fundamental trigger would sharply raise the probability of a headline-driven reversal. That overhang argues against aggressive late chasing at the top of the recent range.
Cross-asset context: commodities, gold and risk sentiment
The wider macro backdrop also matters for USD/JPY. Global markets are starting 2026 with risk appetite still intact. Gold has been testing the $4,400 area as investors price in a dovish Fed pivot and persistent geopolitical risk; silver has pushed above $74 on the same real-yield story. WTI crude is holding above $57.5 a barrel despite last year’s sharp drop, reflecting ongoing supply restraint and geopolitical tension. At the same time, natural-gas prices are oscillating around $3.5–3.6 per mmBtu as warm US weather collides with record output. On the rates side, advanced-economy forecasts for 2026–2027 still point to solid growth, with markets aggressively pricing Fed easing while seeing only slow normalisation from the BoJ. That combination favours carry trades funded in low-yield currencies, especially the yen, and channels capital into higher-yielding or risk assets. For USD/JPY, this environment supports buy-on-dip behaviour as long as there is no abrupt shock to risk sentiment or an unexpected tightening pivot from Tokyo.
Strategic view: is USD/JPY a buy, sell or hold now?
Putting all of this together, USD/JPY sits at a technically strong but politically sensitive zone. The pair trades in an established uptrend, above key moving averages, with higher lows on both intraday and daily charts. The BoJ’s cautious 0.75% stance and the wide yield gap versus the US keep the structural bias tilted upward. US data are firm enough to prevent an aggressive collapse in yields, even as two Fed cuts are priced in. At the same time, the market is crowded near the top of the recent range, intervention risk grows as spot pushes through the high-150s, and the next major catalyst – US jobs data – can swing expectations quickly. Given that balance, the tactical stance here is Hold rather than outright chase. The risk-reward is more attractive buying USD/JPY on pullbacks toward 155.5–156.0 with upside targets in the 158.6–159.2 band than initiating fresh longs at ~157.0 into NFP and intervention risk. Bears lack confirmation for a sustained downtrend as long as 154.4 and 151.7 remain intact, but short-term traders can fade spikes near 158+ with tight risk control. Structurally, the pair remains biased higher, yet at current levels the most disciplined decision – based strictly on the data, positioning, and chart structure – is Hold, wait for cleaner entries, and treat 156.0–155.5 as the zone where the next round of higher-probability decisions will be made.
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