Dollar vs Yen price prediction: Can relentless momentum last? USD/JPY trades near highs

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Dollar vs yen rises 0.11% today

Highlights

Japan's Finance Minister Satsuki Katayama and U.S. Treasury Secretary Scott Bessent met in Washington to address the yen's sharp depreciation against the dollar.
Both officials voiced concern over the recent weakness of the yen and signaled increased bilateral coordination on currency issues.
Japan emphasized readiness to address excessive currency movements, including potential intervention, intensifying anxieties in Tokyo about the strong dollar versus the yen.

Intervention risk rises as Japan signals response to yen slide

Japan's Finance Minister Satsuki Katayama and U.S. Treasury Secretary Scott Bessent met in Washington to address the sharp depreciation of the yen against the dollar. Both officials expressed concern over the currency's recent weakness and signaled increased bilateral coordination, with Japan emphasizing readiness to respond to excessive currency movements, including potential intervention. These developments amplify ongoing anxieties in Tokyo about the strength of the dollar versus the yen.

Upside persists despite overbought signals and strengthening momentum

Technically, USD/JPY is well supported above the Ichimoku Kijun on D1 (¥157.33), which now acts as immediate dynamic support, while resistance appears near the ¥160.00 round number. The short, medium, and long-term trend remain firmly bullish with price action over all major moving averages. Momentum remains strong as the MACD is in 'Buy' territory, ADX on the daily timeframe shows a weak trend but is strengthening on the weekly, and Awesome Oscillator signals continued upside momentum. However, overbought readings from the RSI (71.47), Stochastic RSI (100), CCI (241.82), and positive Bull/Bear Power (1.65) point to stretched conditions and suggest caution as the rally continues.

Sideways bias dominates as overbought risks tempers further gains

In the short term, the pair is expected to move within a typical volatility band of ¥158.87 to ¥160.14 over the next five trading days. There remains a very high probability (over 80%) of further gains, though overbought momentum indicators create elevated risk of a near-term pullback. The baseline scenario is sideways movement within this range, but a break above ¥160.00 would signal bullish continuation toward new highs, while a decisive move below ¥157.33 may open limited downside, cushioned by the underlying bullish momentum and support from moving averages.

Viktoras Karapetjanc, senior expert at Traders Union, sees the USD/JPY pair as fundamentally supported by both global macro trends and policy divergence. The yen remains under pressure after renewed concerns from Japanese and U.S. officials, with Tokyo hinting at further intervention. Karapetjanc notes that bullish momentum dominates across all major timeframes, though the pair looks stretched in the short run. He believes any pullback will likely be shallow given continued dollar strength. "As long as support holds above ¥157.33, the path of least resistance for USD/JPY remains up, and I would favor positioning for further gains on any healthy correction."

Previously it was reported that USD/JPY is exhibiting strong bullish momentum across all timeframes, trading well above its major moving averages, though overbought oscillators highlight growing caution at these elevated levels. Technical indicators support ongoing buyer control, but near-term consolidation is likely as the pair approaches key resistance, with only modest conviction behind the uptrend according to the ADX.

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.