US dollar vs yen price prediction: Is the bullish trend stalling? USD/JPY edges lower to ¥156.38

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Usd vs yen slips 0.16% today

Highlights

USD/JPY advanced as rising U.S. Treasury yields boosted the dollar, while Japan's 10-year government bond yield hit a 27-year high of 2.139%.
Japan's government outlined a record 122.3 trillion yen budget, with increased defense spending heightening focus on the country's fiscal position.
The dollar saw a brief pullback after a downward revision to the U.S. December S&P services PMI and dovish Federal Reserve commentary on rate cuts.

Dollar gains as Treasury yields climb and yen faces domestic pressures

Recent developments show that the US dollar vs yen has advanced, driven by rising U.S. Treasury yields, while the yen is limited by Japan's 10-year government bond yield reaching a 27-year high of 2.139%. Japan's fiscal position is also in focus as the government outlines plans for increased defense spending with a record 122.3 trillion yen budget. There was a brief pullback in the dollar after a revision in the U.S. December S&P services PMI and dovish commentary from a Federal Reserve governor regarding rate cuts.

Mixed momentum as buying bias meets subdued trend and neutral oscillators

Analyzing the technical picture, USD/JPY shows dynamic support at the Ichimoku Kijun level of ¥156.10, while resistance can be expected near the MA-50 or above the next round number on the chart. The MACD on the daily chart signals a strong buying bias, although the ADX remains neutral, reflecting subdued trend strength for now. Oscillators such as the RSI and Commodity Channel Index suggest a neutral to mildly bullish stance, with the Stochastic RSI supporting buyers but indicating possible short-term oversold conditions. The Bull/Bear Power indicator remains positive on the daily timeframe, while the Awesome Oscillator provides no clear directional signal, confirming that daily action is under mild pressure and volatility is low.

Further upside favored as volatility stays contained within resistance band

Over the next five trading days, typical volatility is expected to see USD/JPY oscillate within a band of ¥156.10 to ¥157.29, with sideways consolidation likely around ¥156.70. The probability for further price gains remains high, while a move lower is less likely in the current setting. The baseline scenario calls for the pair to remain contained in a tight corridor, but a clear break above ¥157.29 could trigger a more forceful rally by buyers. On the downside, slipping beneath ¥156.10 support would open the way for further declines, though the longer-term bullish signals make this outcome less probable for now.

Anton Kharitonov, analyst at Traders Union, notes that USD/JPY faces mild short-term selling while maintaining a solid medium- and long-term uptrend. He sees technicals mixed, with the pair bounded by key moving averages and signals staying muted for now. News of elevated Japanese bond yields and ongoing fiscal concerns do little to shift sentiment, as momentum indicators lack strong conviction. "Base case is range-trading ahead, and until ¥157.29 breaks, I remain cautious on chasing upside."

Currently, USD/JPY is holding just below its short-term moving average but above its medium- and long-term averages, reflecting mild short-term indecision within a broader bullish trend supported by strong weekly signals and aligned moving averages. Momentum indicators are mixed with RSI near neutral and MACD modestly positive, while key support is identified near ¥156.10–¥156.18 and resistance is set just above ¥156.50, indicating a likely sideways drift with breakout risk favoring further gains.

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.