Over the past 24 to 48 hours, the USD/JPY market experienced significant volatility but closed near the previous day’s price of 161.226, settling around 161.10. This movement was driven mainly by multiple factors including the Bank of Japan’s (BoJ) rate hike and ongoing expectations of further Federal Reserve (Fed) interest rate increases.

Reports indicated that the BoJ raised its policy rate to 1%, the highest since 1995, which typically would strengthen the yen. However, mounting debt pressures in Japan coupled with a strong US dollar depressed the yen to a fresh 23-month low near 160.80. Additionally, market concerns over possible yen FX intervention have increased investor caution.

Meanwhile, the Fed’s hawkish stance pushed the US dollar index (DXY) to a 13-month high, bolstering demand for USD-denominated fixed-income assets and applying further pressure on the yen. The USD/JPY pair retreated from the previous high near 161.80, reflecting ongoing market uncertainty about the yen’s outlook.

For the average investor, this means that amidst the current mixed monetary policies and geopolitical agreements, the yen may remain under pressure in the short term. The strengthening dollar suggests potential gains for those holding USD assets but also underscores the risks posed by currency volatility.

Daily Chart

On the daily chart, USDJPY has been ascending since late May, breaking multiple resistance levels and consolidating near the 161.4 yearly high. The 20-day and 50-day moving averages formed a golden cross, confirming medium-term bullish momentum. Bollinger Bands are tightening but not yet contracting, suggesting short-term volatility potential. MACD remains in positive territory without divergence, indicating strong buyer momentum and clear bullish sentiment.

1H Chart

The hourly chart over the past 3-5 days shows USDJPY consolidating then attempting a breakout, trading between 160.5 and 161. Bollinger Bands are expanding, indicating likely upcoming volatility. The MACD recently formed a bullish crossover, hinting at further upside. A significant recent bullish engulfing candlestick reinforces short-term upward momentum, signaling a probable breakout above resistance levels.

Technical Trend:  Strong bullish trend

Technically, USDJPY remains in a strong uptrend confirmed by daily golden cross and MACD positivity supporting bullish dominance. Short-term hourly Bollinger Band expansion and bullish engulfing candlestick suggest a near-term breakout is likely. Key support lies near 160-161. A firm hold here paves the way for a run toward 165. Traders should monitor any yen intervention news or macro shifts as these could rapidly alter the trend dynamics.

Today’s economic calendar does not feature any major events directly impacting USDJPY or USD/JPY exchange rates. Various European and UK economic data releases such as average earnings, unemployment, and central bank decisions might indirectly affect risk sentiment and yen safe-haven demand, but short-term USDJPY drivers remain centered on Fed and BoJ policy cues.

Resistance & Support

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