USD/JPY holds flat as sellers maintain pressure below key moving averages

Traders Union
All News
Currency
US Dollar vs Yen drops 0.51% today

Highlights

Bank of Japan policymakers agreed it was appropriate to continue raising policy rates and adjust monetary easing, shifting toward a less accommodative stance.
Japan's government is monitoring the currency market closely with possible intervention, introducing further uncertainty for USD/JPY trading conditions.
USD/JPY faces strong bearish technical pressure with price weakening to ¥157.69 and a very high probability of further downside toward ¥156.9 over the next 2 to 3 trading days.

Policy tightening prospects and intervention risk reshape yen sentiment

Minutes released from the Bank of Japan's September meeting revealed that policymakers agreed it was appropriate to continue raising policy interest rates and to make adjustments to monetary easing, signaling a movement toward a less accommodative stance and impacting interest rate expectations according to FXStreet. Japan's Deputy Chief Cabinet Secretary Minoru Kihara also stated the government was closely watching currency market developments with a high sense of urgency, introducing the prospect of official intervention and adding a layer of uncertainty to trading conditions, according to FXStreet. Additionally, weakness in the US Dollar appeared as the Dollar Index reached its lowest reading since late September following the 2026 midterm elections, accompanied by a drop in Treasury yields as noted by Ebc. These developments contributed to the current balance of factors influencing the US Dollar vs Yen.

Bearish selling bias as price underperforms major moving averages

On the technical front, USD/JPY is positioned below the MA-20 and MA-50 on the hourly chart, and remains well under the MA-200 level on the daily timeframe. The Ichimoku Kijun at ¥158.2 serves as the closest overhead resistance, while price action remains beneath this threshold. MACD maintains a sell bias, and the Awesome Oscillator also confirms intraday selling momentum. ADX remains neutral, and momentum oscillators such as RSI, Stoch RSI, and CCI are holding in their respective neutral zones. Bull/Bear Power is negative, indicating that sellers currently have the upper hand despite low volatility and mixed short-term momentum signals.

Downside risk elevated as consolidation dominates near-term outlook

Over the next 2-3 trading days, USD/JPY is likely to trade in a range between ¥156.9 and ¥158.48, with consolidation as the baseline scenario. The probability of an upward move is assessed as very low, while the risk of a further decline remains very high within this volatility band. A bullish scenario would only be considered if the price breaks above immediate resistance around ¥158.2, whereas a downside scenario could see fresh lows if support is breached.

Anton Kharitonov, analyst at Traders Union, notes that the fundamental shift in Bank of Japan policy and signs of official vigilance are tilting sentiment against USD/JPY. He sees weak technical structure supporting this view, with negative momentum and no clear buy signals. The analyst remains cautious and emphasizes the risk of further declines within the current range. "Unless USD/JPY decisively reclaims the ¥158.2 level, I remain defensive and see no reason to anticipate a bullish reversal."

Earlier, analysts noted that USD/JPY displayed persistent short- and medium-term bullish momentum but remained constrained by longer-term resistance and intervention risks. Recent developments reinforce a shift to short-term weakness and heightened downside risk, making a daily close above the Ichimoku Kijun at ¥158.2 the key threshold for any potential reversal.

Source of Data: USD Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.