Track market-moving stories before they get noisy

U.S. Dollar Tests New Highs As Treasury Yields Rise

DXY 180926 4h Chart U.S. Dollar Index gains ground as traders focus on rising Treasury yields. The yield of 2-year Treasuries settled above the 4.73% level, while the yield of 10-year Treasuries tested the psychologically important 5.00% level.

The nearest resistance level for U.S. Dollar Index is located in the 100.50 – 100.65 range. If U.S. Dollar Index manages to settle above the 100.65 level, it will head towards the next resistance, which is located in the 101.50 – 101.65 range.

EUR/USD Pulls Back Ahead Of The Weekend

EUR/USD 180926 4h Chart EUR/USD is losing some ground as traders stay focused on the recent Fed decision and Warsh’s comments. FedWatch Tool indicates that there is a 57.6% probability that Fed will raise rates at the next meeting in October.

In the EU, traders focused on Germany’s PPI report. The report showed that PPI increased by +4.6% year-over-year in August, compared to analyst forecast of +4.1%.

In case EUR/USD settles below the 1.1450 level, it will head towards the nearest support at 1.1420 – 1.1435. On the upside, a successful test of the resistance at 1.1500 – 1.1515 will open the way to the test of the 50 MA at 1.1560.

GBP/USD Gains Ground As UK Retail Sales Exceed Analyst Estimates

GBP/USD 180926 4h Chart GBP/USD rebounds as traders react to UK Retail Sales report. The report showed that Retail Sales increased by +0.5% month-over-month in August, compared to anlayst forecast of -0.2%.

EUR/USD Price Forecast

Every new EUR/USD analysis as it publishes, today's technical signal and key levels, live price — on one page.

See all EUR/USD forecasts If GBP/USD moves above the resistance level at 1.3400 – 1.3415, it will head towards the next resistance at 1.3470 – 1.3485. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

USD/CAD Attempts To Settle Above 1.4000

USD/CAD 180926 4h Chart USD/CAD tests new highs as traders stay bullish despite rising precious metals markets. Other commodity-related currencies are mixed in today’s trading session.

USD/CAD continues its attempts to settle above the 1.4000 level. In case USD/CAD stays above 1.4000, it will move towards the next resistance, which is located in the 1.4065 – 1.4080 range.

USD/JPY Gains Ground As BoJ Raises Rate To 1.25%

USD/JPY 180926 4h Chart USD/JPY gained strong upside momentum as traders focused on BoJ Interest Rate Decision. The Bank of Japan raised the interest rate from 1% to 1.25%, in line with analyst estimates. However, the BoJ did not provide clear guidance on its plans to raise rates in the future to fight inflation, so the yen found itself under pressure.

I’d note that USD/JPY moved away from session highs as Nikkei reported that BoJ conducted a rate check in the forex market.

Today, traders also had a chance to take a look at Japan’s inflation data. Inflation Rate remained unchanged at 1.9% in August, while analysts expected that it would rise to 2.1%. Core Inflation Rate decreased from 1.8% to 1.7%, compared to analyst forecast of 1.8%. Inlation data served as an additional bearish catalyst for the yen.

If USD/JPY moves above the resistance at 158.00 – 158.50, it will head towards the resistance level at 160.00 – 160.50. On the support side, a move below the 156.50 level will open the way to the test of the support at 155.00 – 155.50.

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GBP/USD struggles around a 6-week low ahead of the BoE rate decision
GBP/USD has fallen to a six-week low, with a stronger dollar following the hawkish Fed hike, as attention turns to the Bank of England's interest rate decision at 12:00 BST today.

The central bank is expected to leave interest rates unchanged at 3.75%, where they have been since December last year.

The decision comes as inflation has risen to 3.1%, but service sector inflation and underlying inflation remained unchanged in August. The labour market is weakening, which is also helping to offset some of the inflationary pressures stemming from the Middle East conflict.

The question is how long the Bank of England will be able to maintain this stance, given that oil and gas prices are rising sharply and are now above the adverse scenario set out by the central bank in July.

Therefore, officials are expected to set the stage for a hike in November, which could be the first of several.

The vote is expected to be 3-6-3 in favour of holding, the same as in July. A more hawkish vote could help to support the pound.

The meeting comes after the Federal Reserve hiked rates by 25 basis points and adopted a hawkish stance at its meeting yesterday, lifting the U.S. dollar to a six-week high.

The 25-basis-point hike to 3.75%-4.00% was forecast. The dot plot points to at least one more rate hike this year.

GBP/USD forecast – technical analysis

GBP/USD broke down below the ascending channel, taking out the 200 EMA and falling to 1.3380. This, combined with the RSI below 50, keeps sellers hopeful of further downside.

Attention will turn to 1.3340, the horizontal support, and 1.3270, the July low. A break below here opens the door to the 1.3200 support zone.

On the upside, immediate resistance is seen at the 200 EMA at 1.3430, with a rise above here exposing the 50 EMA at 1.3490. Should buyers rise above 1.3500, this would create a higher high towards 1.3650.

USD/JPY in focus after a hawkish Fed hike ahead of the BoJ meeting
USD/JPY jumped to a two-week high above 156.00 on Wednesday, before easing back slightly to 158.0 at the time of writing.

The jump came following the Federal Reserve's hawkish hike, lifting the U.S. dollar to a six-week high.

The Federal Reserve raised interest rates by 25 basis points as expected, and delivered its first hike since 2023. However, policymakers also lifted their inflation and growth forecasts, while the dot plot pointed to more hikes this year.

Sixteen of 18 policymakers supported at least one more rate hike this year, with four of those supporting two more rate hikes.

This has prompted markets to price in three additional hikes by the middle of next year.

Attention is now turning to the Bank of Japan, and the hawkish Fed position threatens to keep the U.S.-Japan rate gap wide, even as the Bank of Japan is expected to hike rates as well this week.

The yen weakened by around 1% overnight in the wake of the Fed move. This reversal comes after a sharp rally earlier this month, fuelled by expectations of intervention, faster BoJ monetary policy tightening and the unwinding of some yen-funded carry trades.

For the yen to remain supported, the BoJ will not only need to hike rates but also deliver a hawkish message in order to limit the damage to the currency. Failure to do so, and a disappointment from the BoJ, could see the 160 level come back into focus.

A 25-basis-point rate hike is almost fully priced in, meaning that the focus is firmly on BoJ Governor Ueda's post-decision conference for clues over the pace of additional tightening.

Should the yen weaken back towards the 160 level, it could put intervention risk back on the table.

USD/JPY forecast – technical analysis

USD/JPY's recovery from the 153.00 low has run into resistance at the 156.30 level. The price still trades below its 50, 100 and 200 EMAs in a bearish picture.

Buyers would need to extend the recovery above the 200 EMA at 157.80 and the 50 EMA at 158.20 to put the price on a firmer footing. From here, attention would turn to the 160 resistance zone.

Support is seen at 155.40, with a break below here opening the door to 154.65 before attention would turn back towards 153.00.

The US dollar is consolidating against the yen and Canadian dollar ahead of the key event of the week — the Federal Reserve meeting. The Fed is widely expected to raise its policy rate by 25 basis points to a range of 3.75–4.00%. As this move is already largely priced in, attention will focus on the updated economic projections, dot plot and press conference. Investors will assess whether the September rate hike marks the beginning of a new phase of monetary tightening or whether the central bank will prefer to adopt a wait-and-see approach.

Expectations of a more hawkish Fed are supported by persistent inflationary pressures, recent employment data and rising oil prices. US retail sales data will provide an additional reference point ahead of the meeting. Strong figures could provide further support for the dollar, although the market reaction is likely to remain limited ahead of the Fed decision.

USD/JPY The decline in USD/JPY over the past two weeks has slowed around the key support area of 152.90–153.20. At the start of the week, the price tested this area several times, while buyers managed to establish a foothold above the psychological 155.00 level yesterday. Hawkish Fed rhetoric could support a corrective rise in USD/JPY towards 156.20–157.00. More cautious signals regarding further policy tightening, by contrast, could put renewed pressure on the dollar and lead to another test of the 152.90–153.20 area.

Key events for USD/JPY:

today at 15:30 (GMT+3): US core retail sales; today at 21:00 (GMT+3): US Federal Reserve interest rate decision; today at 21:30 (GMT+3): Federal Open Market Committee press conference.

USD/CAD USD/CAD has recovered from its recent lows and is testing the 1.3895–1.3940 resistance area, despite support for the Canadian dollar from elevated oil prices. A firm move above 1.3940, followed by the level turning into support, could pave the way for a rise towards 1.4000–1.4030. A failed attempt to establish itself above the current resistance area, by contrast, could trigger a renewed decline towards the 1.3760 support level.

Key events for USD/CAD:

today at 15:30 (GMT+3): Canadian building permits; today at 17:30 (GMT+3): US crude oil inventories; today at 18:30 (GMT+3): Federal Reserve Bank of Atlanta GDPNow indicator.

Overall, USD/JPY and USD/CAD remain in consolidation ahead of the key Fed decision. As a 25-basis-point rate hike is already largely priced in, the dollar’s subsequent reaction will depend primarily on the central bank’s projections and rhetoric. Signals pointing to further tightening could support gains in both pairs, while a more cautious Fed stance could put renewed pressure on the US currency.

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Fed hike largely priced, BOJ increase fully priced
Updated Fed dots will shape the policy outlook
BOJ guidance must validate the hawkish OIS repricing
Energy remains tightly linked with longer-dated Treasury yields
Intervention risk continues to distort USD/JPY’s rates relationship
Central banks dominate, energy may decide
All the headlines this week are going to be centred on the Fed and the BOJ. But unless there’s a shock rates call from either, the decisions themselves don’t screen as significant volatility generators.

Instead, it will come down to signalling. For the Fed, that will come via the updated dot plot and economic projections, rather than Kevin Warsh unless he decides to start providing guidance. For the BOJ, it will be the tone of the statement and Governor Ueda’s press conference, given there will be no updated economic projections at this meeting.

The key swing factor that could override all of that central bank discussion is energy. With a tight link between crude oil movements and US yields, and US yields still having a fairly strong relationship with the US dollar, how energy prices evolve could be equally important, if not more so, in determining how USD/JPY performs in the week ahead.

Warsh faces a credibility test
Of all the known event risk this week, nothing comes close to the Fed interest rate decision.

Kevin Warsh has made it clear in his time as chair that, along with not wanting to give markets the answers to the exam before it occurs, he’s also been a strong advocate for allowing markets to evaluate where the appropriate policy rate should sit. After the string of data we’ve seen recently, including Friday’s CPI report, market pricing for a 25 basis point hike to the funds rate has lifted to around 90%.

Source: TradingView

That creates a scenario where, if the Fed doesn’t hike and effectively ignores what markets are signalling about where the appropriate rate should sit, it risks doing serious damage to its credibility and triggering a disorderly reaction, potentially at the back end of the Treasury curve and in the dollar.

The first area of focus will therefore be whether Warsh can convince the FOMC to deliver the hike, or whether we see some splintering with key members voting against it. Any sign of dissent, particularly from influential members, risks sparking a dovish market reaction, whereas an FOMC that is fully on board with the hike would likely do the opposite.

Source: Federal Reserve

Beyond that, attention will fall on the updated Summary of Economic Projections, especially the dot plot. In June, nine of the 18 FOMC members who submitted forecasts signalled they saw the need for at least one hike this year, with six of those indicating more than one. That was substantially different to what had been conveyed three months earlier, when the committee was still projecting a gradual easing cycle with the funds rate eventually troughing around 3%.

Warsh’s press conference will also matter, particularly if we see dissents or a shock rate call. Assuming the Fed hikes, a large portion of the questioning will likely centre on the updated SEP while trying to tease out information on the policy outlook.

So the main questions will be how many hikes are signalled in the updated projections, whether we see any dissents, and what the Fed says about the inflation outlook.

Source: TradingView

Outside of Wednesday’s FOMC decision, the remainder of the US calendar is largely devoid of significant market-moving events. There will be some interest in the retail sales report following July’s surprise decline, although barring another major shock, it is likely to be swallowed up by the Fed later in the session.

BOJ must validate hawkish repricing
Turning to the BOJ on Friday, unless it delivers a stunning 50 basis point hike, all the mail is that rates are going higher. A 25 basis point increase is fully priced.

As such, the focus will be on whether the BOJ can sustain the hawkish shift in expectations that's taken place over the past month. OIS pricing has moved materially higher across the curve, with almost a second hike by year-end now priced and more than three hikes expected by the middle of next year.

Source: Bloomberg

There are no updated economic projections at this meeting, leaving the statement and Ueda’s press conference as the main vehicles for signalling. That means both will need to ooze hawkishness to validate what's priced in the curve. If they don’t, it may deter some newly inked yen bulls from following through with their conviction.

The vote split on the rates call will also be in focus. Multiple dissenters arguing for a 50 basis point move would come across as hawkish, while multiple members preferring to leave rates unchanged would be deemed dovish, even if the BOJ still delivers the expected hike.

Source: TradingView

Outside of the BOJ decision, the Japanese calendar is largely inconsequential for traders. Inflation data for August is released beforehand, but it has been superseded by the Tokyo figures released three weeks earlier and remains heavily influenced by government subsidies, meaning it is now basically overlooked by markets.

The more relevant inflation read arrives the following week, when the BOJ releases its own measure that strips out the impact of government subsidies and other distortions.

Crude, yields and the dollar
While central bank decisions will dominate the headlines, don’t dismiss the importance of energy in determining how USD/JPY fares this week.

The correlation matrix below shows a strong relationship between energy prices and US Treasury yields, particularly further out the curve. Over the past five sessions, WTI’s correlation with 10 and 30-year yields stands at +0.78 and +0.96 respectively, while diesel shows a similarly strong relationship.

Source: LSEG

Correlation doesn’t mean causation, and some of the relationships may be spurious. We don’t know. But for all the narratives around fiscal concerns, the evidence suggests movements at the back end of the curve have been heavily influenced by what’s been happening with energy.

That matters for the dollar because Treasury yields are also showing strong relationships with the DXY. Those links are strongest across the front end and belly, where energy is also showing meaningful relationships, even if the strongest evidence sits further out.

Source: LSEG

So what happens in energy prices could conceivably influence yields either side of the Fed decision, which in turn may also influence the dollar. For USD/JPY, however, that relationship is competing with a far more idiosyncratic factor that may help explain the price action we saw last week: ongoing intervention risk.

Hidden forces still supporting the yen
We saw US Treasury Secretary Scott Bessent make highly unusual statements, such as declaring that he was now “the house” and effectively daring traders to weaken the yen. Japanese Finance Minister Katayama then confirmed again on Friday that Japan remained in close contact with the United States over currency markets.

Then we saw highly unusual price action following the US inflation report, emblematic of how USD/JPY has disconnected somewhat from shifts in US rates, as we’ve seen previously. Core inflation came in hotter than expected, front-end yields pushed higher and Fed pricing increased, yet USD/JPY tried to rally before falling sharply.

We don’t know whether intervention is still taking place, but the price action suggests there is a hidden force making the pair behave differently to what it has in the past. It’s not simply that the BOJ has become hawkish. That has been known for some time and doesn’t explain what we’re seeing.

USD/JPY downside bias remains intact

Source: TradingView

That strange price action following the US inflation report saw USD/JPY’s attempted rally stall above 154.50, a level the pair has now failed above twice since late last week, making it the immediate focal point overhead.

Underneath, the bottom of the current range sits at 152.90, where the pair bottomed early last week. Beneath that, 152.10 is a swing low from January, before 151 comes into view. That is a far more important level, having acted as both support and resistance on multiple occasions over several years. If we were to see a substantial downside unwind, other levels of note include 149.40 and 146.

Above 154.50, 155.50 repeatedly acted as support over periods this year and may now flip to offering resistance. Beyond that, 156.68 and 158 are other levels of note before the 200-day moving average.

More broadly, the string of lower highs and lower lows, the medium and long-term moving averages flattening out or beginning to roll over, and the price sitting beneath all three continue to favour the downside. RSI (14) sits around 29, while MACD is pushing further into negative territory after already staging a bearish crossover.

As such, the message right now favours selling into strength and downside breaks. A bearish bias is preferred heading into this risk-laden week.

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JPY long via FXE/JPY exposure

Buy JPY exposure by going long JPY vs a broad basket: buy Invesco CurrencyShares Japanese Yen Trust (FXY). Rationale: the article’s core driver is widening pressure on the carry trade—BoJ is hiking next week while the yen is already near multi-month highs. If USD/JPY breaks 155 decisively, yen strength typically spreads to other USD-funded trades, lifting JPY broadly.

Key Risk: BoJ hike is delayed/less than expected or US yields fall sharply (cool CPI), causing a broad USD rebound that drags JPY lower.

USD/JPY short

Sell USD/JPY around 154.2. Setup: yen strength is already in motion (below 155.21 support, below 50/100-day EMAs, under 38.2% fib). Catalysts: a likely BoJ 25bp hike narrows the carry gap, while sticky US inflation/gasoline keeps Fed hawkish, but the market is already pricing a big yen move—so any “less hawkish than feared” CPI print or dovish Fed tone should accelerate the trend toward 152 (50% fib).

Key Risk: US CPI comes in hot enough to force a clear Fed hike path and push US yields higher faster than BoJ can, reversing the yen rally.

The Japanese yen has soared in the past few weeks, and is now hovering near its highest level since February this year. The USD/JPY pair has dropped to 154.17, down sharply from the year-to-date high of 163.96. Focus now shifts to some notable macro numbers and the upcoming monetary policy decisions by the Federal Reserve and Bank of Japan (BoJ).

The USD/JPY pair will be in the spotlight today as investors react to several important events. One of them is that the US will release the August consumer price index (CPI), which will provide hints on what to expect. 

There are signs that the Bureau of Labor Statistics (BLS) will publish a strong consumer inflation report. A report on Thursday showed that the headline Producer Price Index (PPI) rose from 0.1% in July to 0.4% in August, while core PPI fell rose 0.2% on a monthly basis. The two numbers came in at 5.4% and 4.6%, respectively. The annual numbers remain above the Federal Reserve’s target of 2.0%. 

Economists expect the upcoming numbers to show that the headline CPI rose by 3.4% last month, with the core CPI falling to 2.4%. Worse, there are signs that inflation will continue rising now that gasoline and diesel prices have continued rising. 

The average gasoline price in the US jumped to $4.27, while diesel crossed the important milestone of $6. This is notable because these benchmarks were trading at $3.19 and $3.7, respectively last year. 

Oil prices continued rising this week as the US and Iran attacks continued. Worse, Houthis have already taken a major port city and are advancing towards the Bab el-Mandeb Strait. Also, Trump has said that he expects the war will end after the election and there are now no talks going on between the two sides. 

These developments mean that the Federal Reserve will need to hike interest rates as soon as next week.

The USD/JPY pair has also crashed as traders wait for next week’s Bank of Japan interest rate decision. Economists are unanimous that the bank will decide to hike interest rates by 25 basis points in this meeting. 

A BoJ rate hike would help to bridge the gap between interest rates in the US and Japan, which, in theory, should invalidate the carry trade opportunity. This view, however, would not be effective if the US hikes rates as well as the spread remains the same.

USDJPY chart | Source: TradingView

The daily chart shows that the USD/JPY pair has slumped in the past few months, moving from a high of 163.97 to the current 154.26. It has remained below the important support level of 155.21, its lowest level in May and August this year.

The pair has moved below the 38.2% Fibonacci Retracement level. Also, it has dropped below the 50-day and 100-day Exponential Moving Averages (EMA). The pair will likely continue falling, potentially to the 50% Fibonacci Retracement level at 152.

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Published: Sep 10, 2026, 16:54 GMT+00:00

$1.16192

-0.13%

The strong rally in the oil markets provided additional support to the American currency.

In this article:EUR/USD

-0.13%

EUR/USD ForecastGBP/USD

-0.20%

GBP/USD ForecastUSD/CAD

+0.10%

USD/CAD ForecastUSD/JPY

+0.48%

USD/JPY Forecast

U.S. Dollar Moves Higher As Traders Focus On Producer Prices Data

DXY 100926 4h Chart U.S. Dollar Index gains ground as traders focus on the strong rally in the oil markets and react to Producer Prices data.

Brent oil rallied above the $107.00 level amid rising tensions in the Middle East. Houthis achieved victory against forces of Yemen’s official government, taking control of a key port on the Red Sea. At this point, Houthis have the ability to control shipping in the Bab el-Mandeb Strait.

PPI increased by +0.4% month-over-month in August, in line with analyst estimates. The previous report was revised from 0% to +0.1%.  Core PPI grew by +0.2%, while analysts expected that it would increase by +0.3%. The previous report was revised from +0.2% to +0.3%. Due to revisions, PPI was higher than expected, which was bullish for U.S. dollar.

If U.S. Dollar Index manages to settle above the 99.00 level, it will head towards the resistance level, which is located in the 99.25 – 99.40 range.

EUR/USD Pulls Back As ECB Raises Rates EUR/USD 100926 4h Chart EUR/USD is losing ground as traders focus on the ECB Interest Rate Decision. The European Central Bank raised the rate from 2.4% to 2.65%, in line with analyst estimates.

ECB President Christine Lagarde said that the hike was “a no brainer”. ECB noted that the conflict in the Middle East generated inflationary pressure. In my opinion, ECB may raise rates at the next meeting due to the situation in the oil markets.

Currently, EUR/USD is trying to settle below the support level at 1.1600 – 1.1615. In case this attempt is successful, EUR/USD will head towards the next support, which is located in the 1.1500 – 1.1515 range.

GBP/USD Retreats As Oil Markets Rally GBP/USD 100926 4h Chart GBP/USD pulled back as demand for U.S. dollar increased amid strong rally in the oil markets. Traders bet that Fed will raise the federal funds rate next week.

If GBP/USD stays below the 50 MA at 1.3527, it will head towards the nearest support level, which is located in the 1.3470 – 1.3485 range. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term.

USD/CAD 100926 4h Chart USD/CAD gained ground as traders focused on the strong pullback in precious metals markets. Gold is down by -1%, while silver markets pulled back by -4.5%. Other commodity-related currencies are also losing ground in today’s trading session.

Currently, USD/CAD is trying to settle above the resistance level at 1.3825 – 1.3840. In case USD/CAD climbs above the 1.3840 level, it will head towards the next resistance, which is located in the 1.3900 – 1.3915 range.

USD/JPY Gains Ground Amid Rising Treasury Yields USD/JPY 100926 4h Chart USD/JPY is moving higher as traders bet on hawkish Fed and focus on rising Treasury yields. The yield of 2-year Treasuries settled above the 4.54% level, while the yield of 10-year Treasuries moved above 4.91%.

The nearest resistance level for USD/JPY is located in the 155.00 – 155.50 range. if USD/JPY settles above 155.50, it will head towards the 50 MA at 156.33. A move above the 50 MA will open the way to the test of the next resistance at 158.00 – 158.50.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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Published: Sep 9, 2026, 17:02 GMT+00:00

$1.16399

+0.10%

U.S. dollar is losing some ground as traders worry that debt markets get out of control.

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USD/JPY Forecast

U.S. Dollar Remains Under Pressure As Bessent Raises Bond Buybacks To $6 Billion

DXY 090926 4h Chart U.S. Dollar Index is losing some ground as traders focus on Treasury’s decision to boost bond buybacks to $6 billion. Bessent continues his attempts to put pressure on yields, but they are rising amid rally in the oil markets. Worries about long-term sustainability of U.S. finances also push yields higher.

The yield of 10-year Treasuries climbed towards the 4.85% level, while the yield of 30-year Treasuries tested the psychologically important 5.30% level.

U.S. Dollar Index continues its attempts to settle below the support level at 98.60 – 98.75. In case U.S. Dollar Index manages to settle below the 98.60 level, it will head towards the next support at 97.70 – 97.85. RSI is in the moderate territory, so there is plenty of room to gain additional downside momentum in the near term.

EUR/USD Moves Higher Ahead Of Tomorrow’s ECB Decision EUR/USD 090926 4h Chart EUR/USD gained some ground as traders prepared for ECB Interest Rate Decision, which will be released tomorrow. Analysts expect that ECB will raise the interest rate from 2.4% to 2.65% due to rising oil prices.

The European Central Bank is forced to raise rates as the EU economy will face inflationary pressure due to high energy prices. It remains to be seen whether winter will be cold, but energy prices will likely stay high anyway.

If EUR/USD climbs above the 1.1650 level, it will head towards the resistance level at 1.1685 – 1.1700.

GBP/USD Remains Stuck Near Strong Resistance Level GBP/USD 090926 4h Chart GBP/USD remains stuck near the resistance level at 1.3550 – 1.3565. Traders are not ready to buy U.S. dollar amid rising Treasury yields. UK bond yields have  also settled near multi-year highs as traders worry about the situation in the UK economy.

If GBP/USD manages to settle above the resistance at 1.3550 – 1.3565, it will move towards the next resistance level, which is located in the 1.3635 – 1.3650 range. On the support side, a move below the 50 MA at 1.3528 will push GBP/USD towards the next support level, which is located in the 1.3470 – 1.3485 range.

USD/CAD Rebounds Above 1.3800

USD/CAD 090926 4h Chart USD/CAD gains ground despite the strong rally in precious metals markets, which was triggered by Treasury’s decision to boost bond buybacks. Gold climbed above the $4400 level, while silver rallied above $67.50. Other commodity-related currencies were mixed in today’s trading session.

The nearest resistance level for USD/CAD is located in the 1.3825 – 1.3840 range. In case USD/CAD manages to settle above 1.3840, it will head towards the next resistance level at 1.3900 – 1.3915.

USD/JPY Tests The 153.00 Level USD/JPY 090926 4h Chart USD/JPY pulls back as traders focus on U.S. bond buybacks. Recent interventions, expectations of a rate hike from BoJ, and problems in U.S. debt market serve as positive catalysts for the Japanese yen.

The nearest support level for USD/JPY is located in the 152.50 – 153.00 range. A successful test of this level will push USD/JPY towards the support at 149.50 – 150.00. RSI has recently moved back into moderate territory, so there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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Published: Sep 8, 2026, 16:53 GMT+00:00

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Key Points:EUR/USD is swinging between gains and losses as traders react to Germany's Exports data. USD/CAD made an attempt to settle below the support at 1.3750 - 1.3765.USD/JPY rebounded from session lows as traders focused on rising Treasury yields.

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USD/JPY Forecast

U.S. Dollar Attempts To Rebound After Recent Pullback

DXY 080926 4h Chart U.S. Dollar Index moved away from session lows as traders focused on rising Treasury yields. The yield of 2-year Treasuries climbed towards the 4.40% level, while the yield of 10-year Treasuries settled near 4.80%.

I’d note that Bessent’s buyback efforts have so far failed to push yields of longer-dated bonds lower. The yield of 30-year Treasuries settled near 5.25%, close to the critical 5.30% level.

In case U.S. Dollar Index climbs above the 99.00 level, it will head towards the nearest resistance level, which is located in the 99.25 – 99.40 range.

EUR/USD Stays Above The 1.1600 Level EUR/USD 080926 4h Chart EUR/USD is mostly flat as traders focus on Germany’s Exports report. The report showed that Exports decreased by -0.8% month-over-month in July, compared to analyst forecast of 0%.

I believe that traders are already cautious ahead of the ECB Interest Rate Decision, which will be released on Thursday.

The nearest support level for EUR/USD is located in the 1.1600 – 1.1615 range. If EUR/USD manages to settle below the 1.1600 level, it will head towards the next support level at 1.1500 – 1.1515. RSI is in the moderate territory, so there is plenty of room to gain momentum in case the right catalysts emerge.

GBP/USD Attempts To Settle Above 1.3565 GBP/USD 080926 4h Chart GBP/USD continues its attempts to settle above the resistance level at 1.3550 – 1.3565 as traders focus on the BRC Retail Sales Monitor report from the UK. The report showed that Retail Sales increased by +0.5% year-over-year in August, compared to analyst forecast of +1.2%.

If GBP/USD manages to settle above the 1.3565 level, it will head towards the next resistance, which is located in the 1.3635 – 1.3650 range. On the support side, a move below the 50 MA at 1.3533 will push GBP/USD towards the next support at 1.3470 – 1.3485.

USD/CAD Rebounds From Session Lows

USD/CAD 080926 4h Chart USD/CAD moved lower as traders focused on U.S. – Canada trade war. Canada’s Prime Minister Mark Carney said that counter-tarrifs against the U.S. were necessary to protect Canadian businesses. Interestingly, the market does not believe that the trade war is a negative catalyst for the Canadian currency.

From the technical point of view, USD/CAD made an attempt to settle below the support level at 1.3750 – 1.3765 but lost momentum and rebounded towards the 1.3790 level. In case USD/CAD settles back above 1.3800, it will head towards the nearest resistance at 1.3825 – 1.3840. A successful test of this level will push USD/CAD towards the next resistance at 1.3900 – 1.3915.

USD/JPY Climbed Back Above 154.00 Amid Rising Treasury Yields USD/JPY 080926 4h Chart USD/JPY attempts to rebound after the strong sell-off as traders react to rising Treasury yields and focus on Japan’s second-quarter GDP Growth Rate report. The report showed that Japan’s GDP Growth Rate was +0.4%, in line with analyst estimates.

Traders try to guess whether BoJ is ready to intervene again at current levels or the Bank has finished its interventions. The expectations of a rate hike from the BoJ served as an additional bullish catalyst for the yen in recent trading sessions, but Fed may also raise rates at the meeting on September 16.

In case USD/JPY stays above the 154.00 level, it will head towards the resistance level at 155.00 – 155.50. A move above the 155.50 level will open the way to the test of the resistance level at 157.50 – 158.00.

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Vladimir is an independent trader, with over 18 years of experience in the financial markets. His expertise spans a wide range of instruments like stocks, futures, forex, indices, and commodities, forecasting both long-term and short-term market movements.

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The Japanese yen is dominating the start of the week, with USD/JPY extending its decline below 155 and trading towards 153. Thin liquidity around the US holiday likely exaggerated the initial move, but the follow-through suggests this is more than just a liquidity event.

The move still looks primarily like a yen story rather than a broad rejection of the US dollar. Markets are increasingly focused on the prospect of a more hawkish Bank of Japan, alongside expectations that Japan’s GPIF could increase its allocation towards domestic assets. That combination is encouraging investors to unwind yen-funded carry trades and rebuild exposure to Japanese assets.

From a technical perspective, USD/JPY remains firmly inside its descending channel. The break below 155.00 has weakened the structure further, with 152.00 now the next meaningful support area. That level marked an important floor earlier in the year. A decisive break below it would bring 150.00 into view.

For now, trying to fade the yen rally looks risky. Even if the short-term fundamental move appears stretched, carry-trade unwinding can become self-reinforcing: a stronger yen forces leveraged positions to reduce exposure, which creates further yen buying and adds momentum to the move.

The bigger question is whether this yen strength can continue if the Federal Reserve tightens policy next week.

The broader dollar backdrop remains more constructive than USD/JPY currently suggests. Strong US payrolls and Brent crude trading close to $100 per barrel both argue against an aggressively dovish Fed, yet markets are still pricing only around 15 basis points of tightening for September. That leaves scope for US yields and the dollar to reprice higher if incoming inflation data remain firm.

US equity futures are pointing towards a softer reopening today. In an otherwise light calendar, weaker risk sentiment could provide some support to the dollar, although probably not enough on its own to reverse the current yen momentum.

The main event for the week is therefore Friday’s US CPI report. A hotter inflation print would strengthen the case for Fed tightening and could challenge the current USD/JPY sell-off. A softer number, however, would remove one of the dollar’s remaining supports and potentially allow the move towards 152 and 150 to continue.

The yen has continued to gain relevance during recent trading sessions and, over the last four trading days, USD/JPY has declined by nearly 3.6%, highlighting the strength currently being displayed by the Japanese currency against the U.S. dollar. This selling pressure has remained in place as markets continue digesting recent updates regarding Japan's currency interventions while also maintaining expectations of a more aggressive Bank of Japan. As long as these factors remain dominant, downside pressure on USD/JPY could continue to be an important feature of the market in the sessions ahead.

Is Intervention Risk Returning to Japan?
The most important short-term development behind the yen's recent strength relates to the latest confirmations regarding Japan's efforts to support its currency through direct intervention.

Recent data revealed that Japan carried out a record intervention program during August. International reserves declined by approximately $76.6 billion, marking the largest monthly drop seen in recent years and falling from July's peak of $1.287 trillion in total reserves. As a result, markets have interpreted a significant portion of this decline as being linked to yen-buying operations.

In addition, the Ministry of Finance confirmed that approximately $98.6 billion was deployed in currency interventions through August 26, including operations conducted in coordination with the United States. This information is particularly important because it confirms that intervention threats are no longer merely theoretical but are instead supported by figures directly released by the Japanese government.

The market's interpretation has been straightforward: Japanese authorities remain willing to sell dollars and buy yen aggressively whenever they believe the currency is under excessive pressure. Consequently, this confirmation has increased expectations that intervention could continue to play an important role in the months ahead, helping reinforce demand for the yen over the short term.

Alongside this situation, expectations of a more restrictive monetary policy from the Bank of Japan also remain important. Markets are currently assigning more than a 62% probability to a rate increase at the September 17 meeting, taking the benchmark rate from 1.00% to 1.25%. This reflects continued expectations that Japan will gradually move away from the ultra-low interest rate environment that has characterized its monetary policy for decades.

Source: centralbankwatch

Taking all of this into account, the outlook surrounding the yen appears to have changed significantly compared with previous weeks. Expectations of additional interventions and a more aggressive Bank of Japan are helping support interest in the Japanese currency. On one hand, markets continue to consider the possibility of renewed yen purchases by authorities. On the other, higher interest rates improve the relative attractiveness of yen-denominated investments. As long as these factors remain in place, downside pressure on USD/JPY could continue to be an important feature of the short-term outlook.

Could the U.S. Dollar Become a Threat?
At the same time, it is important to recognize that the main obstacle to further yen strength could remain the U.S. dollar. This issue gained importance after last Friday's NFP report, which delivered employment figures well above expectations and once again supported the possibility of a more aggressive Federal Reserve.

Although this dynamic has not yet translated into a significant recovery in the dollar itself, it could become a relevant factor over the coming weeks. For now, the DXY Index continues to trade around the 98-point area without registering meaningful declines and remains relatively stable near the lows established in recent weeks.

Part of this lack of reaction may be explained by the U.S. market holiday, which tends to reduce both activity and volatility across financial markets.

Source: TradingEconomics

The key point to monitor is whether expectations of a more hawkish Federal Reserve begin translating into a more meaningful recovery in the dollar. If that occurs, part of the yen's recent advance could begin to face resistance. Under such a scenario, USD/JPY could move into a more balanced trading environment, particularly if both central banks continue progressing toward more restrictive policy settings over the coming months.

 

USD/JPY Technical Outlook

Source: StoneX, Tradingview

A Potential Trendline Begins to Take Shape: The recent decline in USD/JPY has led to the formation of a sequence of increasingly lower lows on the chart, a development that is beginning to shape a potential bearish trendline. As long as selling pressure remains dominant, this structure could continue to strengthen and become the most important technical pattern to monitor in the weeks ahead.

 
MACD: The MACD histogram continues to move below the neutral 0 line, indicating that the average strength of short-term moving averages remains tilted toward the downside. As long as this behavior persists, bearish momentum could continue dominating market activity.

 
RSI: A similar dynamic can be seen in the RSI, which continues to move lower below its neutral threshold. However, it is also worth noting that the indicator has now fallen below the 30 oversold level. This suggests that selling pressure may be becoming excessive in the short term and could create room for temporary bullish corrections over the coming sessions.

 
Key Levels:

158.235 – Key Resistance: This level coincides with the 200-period Simple Moving Average and represents the most important upside barrier on the chart. Price action returning toward this area could challenge the formation of the current bearish structure and favor a broader phase of consolidation during the weeks ahead.

 
155.928 – Nearby Barrier: This area corresponds to the nearest retracement zone on the chart and stands as the primary reference point for potential short-term bullish corrections.

 
152.441 – Key Support: A support area not seen since February and currently the most important downside barrier within the market. A move toward this level could reinforce the dominant bearish bias and further confirm the downtrend structure that has emerged during recent sessions.

 
Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

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Goldman sees USD/JPY falling to 140-145, while Crédit Agricole forecasts a rebound to 163 by December. The US Dollar to Japanese Yen (USD/JPY) exchange rate ended Friday near 156.25 following one of its sharpest weekly reversals of 2026.

USD/JPY fell from above 160.00 to a low near 155.31 before recovering 0.38% during Friday's session.

The move has opened a striking disagreement between a Goldman Sachs trader and Crédit Agricole.

Image: USD JPY 48hr chart The 48-hour chart shows the pair falling almost continuously from 158.95 before stabilising around 156.25.

Support is located near 155.30, while a recovery through 157.10-157.25 would weaken the immediate bearish signal.

Goldman analyst outlines 140-145 scenario A Goldman G10 spot trader linked the Yen's advance to hawkish Bank of Japan comments, carry-trade liquidation and speculation that Japan's GPIF could increase its domestic bond allocation.

The trader said: "If US data comes in softer, or the Fed isn't able to hike, and in combination with that, the BOJ come across more hawkish, I think you can see USDJPY continue to grind lower. But it really is all about this shift from the GPIF which really gets us lower into the 140-145 range over the next 6-12 months."

The 140-145 range is a conditional trader view, not the official Goldman Sachs house forecast.

Friday's 162,000 payroll increase also challenges one of its central assumptions by reducing the immediate risk of softer US data or a less hawkish Federal Reserve.

Crédit Agricole sees a return to 163 Crédit Agricole takes the opposite near-term view, forecasting USD/JPY at 162 in September and 163 in December.

Its projections then decline gradually to 162 in March 2027, 161 in June, 158 in September and 156 by December 2027.

The bank said: "Record levels of intervention have capped USD/JPY’s rally at 164, but for the JPY to stage a sustainable rally the BoJ needs to accelerate the pace of its rate hikes reducing the currency’s appeal as a carry funder."

It added: "Elevated oil prices and investor concerns about Japan’s fiscal sustainability still weigh on the JPY."

A GPIF shift could change that balance.

Crédit Agricole noted: "If Japan’s GPIF allocates more of its AUM to domestic bonds capping super-long end JGB yields, fiscal sustainability concerns would ease."

The MUFG forecast for USD/JPY at 152 sits much closer to the Goldman trader's direction than Crédit Agricole's 163 call.

Price action around 155.30 and 157.25 will provide the first indication of whether the latest Yen surge is extending or beginning to correct.

Exchange Rates UK Research Our currency coverage draws on live market data, official economic releases and published bank research.

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EUR/USD slides after strong US jobs data as USD/JPY tests a major swing low and USD/CAD surges following a sharp Canadian employment miss.

In this article:EUR/USD

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USD/JPY ForecastUSD/CAD

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USD/CAD Forecast

EUR/USD Technical Analysis

EUR/USD price chart showing price at 1.16006, trading below the 50 EMA (1.16133) and the 200 EMA (1.16155). Source: TradingView The euro has plunged after the much stronger-than-anticipated jobs number coming out of the United States, sending it all the way down to basically 1.1585 or so before bouncing. I think we now have a range-bound market that doesn’t really know what to do. I currently have this range between yesterday’s point where I said I would be a seller at 1.1640 and the bottom here at 1.1580.

I do favor, I suppose, the downside from a longer-term standpoint still, but this is a market that, at least in the short term, probably is going to bounce around. Keep in mind Monday is a holiday in the United States.

USD/JPY Technical Analysis

USD/JPY price chart showing price at 155.732, trading below the 50 EMA (156.968) and the 200 EMA (158.518). Source: TradingView The dollar-yen is suddenly a lot more interesting to me. This is a major swing low that we find ourselves testing again. It was interesting that the initial reaction was to go to the upside. Makes sense: interest rate spike. I think there’s a real chance of a bounce here, but having said that, there’s a lot of fear out there about the Bank of Japan. I think longer term, the Bank of Japan has very limited options, but it is an interesting turnaround.

So, I’ll be watching this today to see how it plays out. We can see that it is getting pretty aggressive. I think somebody’s trying to keep this from popping higher based on the action that I see right now. That being said, if we take out the top of this candlestick, that’d be pretty bullish.

USD/CAD Technical Analysis USD/CAD price chart showing price at 1.38654, bouncing sharply above the 200 EMA (1.38508). Source: TradingView The dollar against the Canadian dollar is just screaming higher. Not a huge surprise; there are a lot of things working against Canada right now, not the least of which is the United States. Canadian employment came in at -41,000 as opposed to the supposed addition of 15,000, so that’s a huge miss for Canada; it’s a huge gain for the United States. The trade war going on at the same time, of course, has major ramifications as well. I am bullish, looking at short-term pullbacks as buying opportunities.

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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

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Why Brent’s break above $97 is failing to lift Dollar, and why Japan, not oil, is setting today’s currency direction What’s happening: USD/JPY broke decisively through 157.99 to around 156, bringing the 155 area back into range, as Yen’s rally gathers fresh momentum from speculation that Japan’s roughly $2 trillion GPIF could raise its domestic bond allocation, on top of an already-hawkish BoJ repricing. At the same time, Brent climbed to an intraday high around $97.62, its strongest level in six weeks, as the US-Iran conflict shows signs of extending well beyond 2026.

Why it matters: Brent above $97 and a conflict that could extend into 2027 would normally form a potent Dollar-supportive combination through inflation and rates. Instead, Dollar is broadly weaker because Japan has taken control of the FX narrative. Oil is still setting global inflation risk, but today, Japan is setting currency direction.

Yen Takes Over as GPIF Speculation Adds to BoJ Repricing Yen extended its powerful rally on Thursday, sending USD/JPY decisively through 157.99 to around 156 and putting the 155 area back within reach. Latest leg appears to have received fresh fuel from speculation surrounding Japan’s roughly $2 trillion Government Pension Investment Fund. GPIF held an unusual management committee meeting on August 21, its first August meeting since 2019, and revisited discussion around its basic portfolio only five months after a March assessment concluded that a review was unnecessary.

Market interest centers on whether GPIF could eventually raise its strategic allocation to domestic assets, particularly government bonds. Domestic bonds currently carry a 25% target allocation, alongside 25% each for domestic equities, foreign bonds and foreign equities. The timing is significant because Japan’s 10-year government bond yield has climbed roughly one percentage point since March and briefly reached 3.015% this week, highest since 1996. Higher domestic yields are already changing relative attractiveness of Japanese assets, with Japanese investors reducing overseas bond exposure this year. A larger GPIF domestic allocation would reinforce that repatriation theme and potentially relieve some upward pressure on JGB yields.

That speculation is adding to a much broader Yen-positive repricing already underway. BoJ officials have become increasingly explicit about further tightening, with markets now focused not only on a possible September hike but on a faster cycle over coming year. Japan’s top currency diplomat Atsushi Mimura added another layer of caution Thursday, saying he was “neither satisfied nor reassured” by recent Yen developments and that authorities remained on “a state of heightened alert.” He declined to confirm whether officials had conducted a rate check. Traders nevertheless continue to attribute Yen strength primarily to BoJ tightening expectations rather than fresh intervention.

The 155 level is critical. USD/JPY is approaching the same territory reached after July’s record intervention campaign, which cost Japan roughly $96.5bn and included rare US participation. The 155.22 area marks July’s post-intervention low, while 155.01 provides nearby technical support. This time, however, pair is approaching those levels organically rather than through any confirmed official Yen buying.

Why the 155 Level Matters Japan’s 10-year JGB yield: briefly reached 3.015% this week, highest since 1996. July’s record intervention: cost roughly $96.5bn, included rare US participation. 155.22: July’s post-intervention low. 155.01: nearby technical support. Mimura: “neither satisfied nor reassured,” authorities on “a state of heightened alert.” July’s Intervention-Driven Move vs. Today’s Organic Approach to 155 July’s Intervention Today How USD/JPY reached this territory Record intervention, cost roughly $96.5bn, included rare US participation Approaching organically, no confirmed official Yen buying Key levels 155.22 (post-intervention low), 155.01 (support) Same levels now back within reach Attributed driver Direct official Yen buying BoJ tightening expectations and GPIF speculation Dollar Weakens Even as Oil Sends a Normally Bullish Signal Yen’s surge has become dominant force in FX, with Dollar lower against all major counterparts despite a backdrop that would normally be considerably more supportive. In Dollar index specifically, Yen’s sizeable weighting means its appreciation directly pulls index lower. More broadly, modest easing in Treasury yields has allowed Dollar weakness to spread across EUR, GBP and CHF as traders focus on Japanese policy repricing rather than extending this week’s US rates trade.

That creates today’s most counterintuitive cross-asset signal. Brent has broken above $97 to fresh six-week highs as US-Iran conflict intensifies, yet Dollar is falling. Earlier this week, higher oil transmitted relatively cleanly through inflation fears into higher Treasury yields and firmer expectations for Fed tightening. That channel has not disappeared, but it is being overshadowed in FX by Yen’s much larger independent move and the pause in US yields.

Wednesday’s softer ADP report, with private payrolls rising only 38K, contributed to that pause in further hawkish repricing, but it is not the principal driver of Thursday’s Dollar move. Initial jobless claims subsequently matched expectations at 206K, offering little additional direction. Markets still attach substantial probability to September Fed hike, leaving Friday’s NFP as decisive test. For now, more revealing question is not simply why Dollar is weaker, but why Brent above $97 has failed to make Dollar stronger. Answer lies in Japan: Yen and BoJ repricing have become larger currency-market forces today.

Oil Story Shifts From Escalation to Duration Brent meanwhile climbed to an intraday high around $97.62, extending this week’s rally and reaching its strongest level in six weeks. But narrative is beginning to shift. Earlier phases of renewed fighting were dominated by immediate questions over each US strike, Iranian retaliation and potential disruption to Strait of Hormuz. Markets are now considering a more difficult possibility: conflict and impaired regional energy flows could persist into 2027. Recent market commentary has explicitly moved toward that longer time horizon, with Capital Economics expecting restoration of Middle East energy flows to be delayed until early next year and forecasting Brent around $100 by end-2026.

That matters more for inflation than another isolated military exchange. A conflict measured in additional months rather than days would prolong pressure on shipping, inventories and refined-product markets, increasing chances that energy inflation becomes persistent enough to influence central-bank decisions. Iranian retaliation has also widened geographically, while US officials continue to signal that military pressure could intensify again even as Washington tries to limit escalation ahead of November elections. Reuters reported that administration officials see possibility of more intense attacks after midterms, underscoring absence of a clear near-term exit from a war now in its seventh month.

The closing contradiction is therefore striking. Brent above $97 and rising concern that US-Iran conflict could extend into 2027 would normally form a potent Dollar-supportive combination through inflation and rates. Instead, Dollar is broadly weaker because Japan has taken control of FX narrative. Oil is still setting global inflation risk, but today, Japan is setting currency direction.

Related Coverage Yen & Precious Metals Deep Dives Read why Silver’s rebound from 63.27 still depends on holding 62.54-62.92 to keep its five-wave recovery from 54.77 alive ahead of Friday’s NFP: Silver’s Correction Has Reached Its Line in the Sand — What Happens Next?. See why Friday’s NFP creates an asymmetric setup for USD/JPY, with weak data opening a clearer path toward 155 than strong data does above 160: USD/JPY Tumbles Under the Shadow of Intervention, Faces Asymmetric NFP Test. US Data Deep Dive Read why jobless claims matching expectations at 206K still leaves Friday’s NFP as the clearer labor-market signal: US Initial Jobless Claims Rise from 204K to 206K. Global Inflation Deep Dives See why Eurozone PPI’s swing to +1.6% m/m was driven largely by a 5.6% jump in energy prices, with annual producer inflation accelerating to 5.8%: Eurozone PPI Surges 1.6% M/M as Energy Drives Renewed Producer Inflation (full Eurostat release). Read why Swiss CPI’s jump to 0.8% was driven mostly by energy and imported prices, with core inflation holding at 0.4%: Swiss CPI Jumps to 0.8%, but Energy Drives Much of Inflation Surprise. Global PMI Round-Up See why UK services hitting a four-month high still came with employment falling for a 23rd straight month: UK PMI Services Hits Four-Month High as Cost Pressures Reaccelerate. Read why Eurozone’s composite PMI holding at an eight-month high alongside stalled disinflation is strengthening the case for ECB tightening: Eurozone PMI Composite Holds Firm as Sticky Prices Strengthen ECB Tightening Case. See why Japan’s record composite selling-price inflation is adding to the case for another BoJ hike even as growth accelerates: Japan PMI Growth Accelerates as Record Selling Prices Strengthen BoJ Hike Case. Read why Australian services confidence hit a six-month high even as fuel and wage costs kept input inflation elevated: Australia PMI Services Holds Firm at 53.2 as Confidence Rises but Costs Stay High. See why China’s services and composite PMI gains reflect stronger domestic demand and sustained hiring: China RatingDog PMIs Strengthen as Services and Employment Gain Momentum. Frequently Asked Questions Q: Why is Dollar falling even though oil just broke above $97? A: Because Yen’s much larger, independent move is overwhelming the usual oil-to-Dollar transmission channel. Higher oil normally supports Dollar through inflation fears feeding into higher Treasury yields and firmer Fed tightening expectations, and that channel hasn’t disappeared. But Yen’s sizeable weighting in the Dollar index, combined with a pause in US yields, means Japanese policy repricing is currently the bigger force in FX. The real question today isn’t why Dollar is weaker, it’s why Brent above $97 hasn’t made it stronger, and the answer is Japan.

Q: What is GPIF and why does speculation about it matter for Yen? A: GPIF is Japan’s roughly $2 trillion Government Pension Investment Fund. It held an unusual management committee meeting on August 21, its first August meeting since 2019, revisiting its basic portfolio just five months after concluding in March that no review was needed. Markets are watching whether GPIF could raise its 25% target allocation to domestic bonds. A larger domestic allocation would reinforce the repatriation trend already underway as Japanese investors reduce overseas bond exposure, adding further support to Yen and potentially easing some upward pressure on JGB yields.

Q: How is this approach to 155 different from July’s intervention? A: July’s move to the 155 area came from a record, roughly $96.5bn intervention that included rare US participation. This time, USD/JPY is approaching the same 155.22 and 155.01 levels organically, with no confirmed official Yen buying. Traders are attributing the move to BoJ tightening expectations and GPIF speculation rather than direct intervention, even though currency diplomat Mimura says authorities remain on “a state of heightened alert.”

Key Takeaways USD/JPY broke through 157.99 to around 156: Bringing the 155 area back into range for the first time since July’s intervention. GPIF speculation is adding fresh fuel to Yen’s rally: Markets are watching whether Japan’s roughly $2 trillion pension fund raises its 25% domestic bond allocation after an unusual August 21 committee meeting. Japan’s 10-year JGB yield briefly hit 3.015% this week: The highest since 1996, up roughly one percentage point since March. Currency diplomat Mimura kept intervention rhetoric alive: Saying he’s “neither satisfied nor reassured,” though traders still attribute Yen strength to BoJ tightening expectations, not intervention. Brent climbed to a six-week high around $97.62: As the oil narrative shifts from immediate escalation questions to concern the conflict could extend into 2027. Reuters reported officials see possible intensified attacks after the US midterms: Underscoring no clear near-term exit from a conflict now in its seventh month. Dollar is broadly weaker despite a combination that would normally support it: Brent above $97 and extended conflict risk usually mean higher inflation and rates support for Dollar, but Japan has taken control of the FX narrative instead. Unlike July, today’s approach to 155 is organic: No confirmed official Yen buying, unlike July’s roughly $96.5bn intervention with rare US participation. What to Watch Next Friday’s US nonfarm payrolls report is the decisive near-term test for Dollar, following a softer ADP print and in-line jobless claims. Watch whether USD/JPY breaks below 155, further signals on GPIF’s portfolio review, and whether Brent extends toward $100 as Capital Economics and others push their Middle East normalization timelines further into 2027.

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Key takeaways JPY strength accelerates: USD/JPY fell 0.91% on 2 September and extended its decline by another 1.35% on 3 September, a move comparable with the sharp decline seen around the July US-Japan FX intervention. Fundamentals are turning more yen-supportive: US Treasury Secretary Scott Bessent’s support for decisive Japanese action, BoJ policymaker Hajime Takata’s discussion of larger or consecutive rate hikes, and renewed intervention risk have strengthened the bullish JPY narrative. 200-day MA breakdown damages USD/JPY’s uptrend: The pair has broken below its 200-day MA and erased its gains since the 3 August low. Unless 158.04/50 is reclaimed, downside risk remains towards 155.03 and 153.84. In the past 40 hours, the Japanese yen has strengthened dramatically against the US dollar, a trend that began on Wednesday, 2 September 2026, when USD/JPY declined by 0.91%.

In follow-through today (Wednesday, 3 September 2026), USD/JPY has extended its losses by a further 1.35% at the time of writing (see Fig. 1).

The current decline of the USD/JPY is almost on par with the daily loss of 1.32% recorded on 31 July 2026, where Japan and the US confirmed their first joint FX intervention in around 28 years following the Japanese government’s sole intervention a day earlier on 30 July 2026, in bid to stall the steep pace of JPY weakening where USD/JPY soared to the 164 handle on 23 July 2026, its highest level in about 40 years.

Fig. 1: Daily rate of change (%) of USD/JPY with key events as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

Today’s swift decline in USD/JPY smells like FX intervention, with no clear catalyst in relevant economic data releases.

However, so far, there are no official press releases from Japan or the US confirming any form of intervention, and no “according to sources” reporting from media outlets.

What we know so far… Here are the three fundamental developments to reinforce the current bout of JPY strength:

US Treasury Secretary Scott Bessent expressed support for decisive Japanese action to address yen weakness to Bank of Japan (BoJ) Governor Ueda during the G-20 finance and central bank leaders meeting last weekend, according to a readout released by the US Treasury Department on Tuesday, 1 September 2026. This reduces the political constraint on further BoJ tightening and suggests Washington is increasingly comfortable with a stronger yen. BOJ board member Hajime Takata said policymakers should consider options beyond the conventional 25-basis-point rate increase, including larger or consecutive hikes, said in a news conference on Wednesday, 2 September 2026. While Takata remains one of the BoJ’s most hawkish members, his comments increase the risk that the central bank accelerates its tightening cycle. The speed of the yen’s appreciation placed traders on high alert for another round of intervention. Although there was no immediate confirmation of official yen buying, the threat of action creates an increasingly asymmetric risk around the psychologically important 160.00 region. Let’s now unpack the short-term trajectory (1 to 3 days) of the USD/JPY from a technical analysis perspective.

Major uptrend phase of USD/JPY has been damaged, bounce before a new drop Fig. 2: USD/JPY medium-term trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

Fig. 3: USD/JPY minor trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.

Today’s swift bearish reaction in USD/JPY comes right after the retest of a key pullback resistance level at around 160.30, a former major ascending trendline support from the 22 April 2025 low (see Fig. 2).

Today’s decline in USD/JPY has sent it below the key 200-day moving average and erased all its gains from the prior one month, since the 3 August 2026 low of 155.23 (see Fig. 2).

The current steep intraday decline in USD/JPY has pushed the hourly RSI momentum indicator into oversold territory, but there is no clear bullish divergence at this juncture (see Fig. 3).

Hence, USD/JPY may now form a potential minor dead cat bounce at the near-term support of 156.32, towards the near-term resistance of 157.30.

Watch the 158.04/50 key short-term pivotal resistance (also the 200-day moving average). If this zone is not surpassed to the upside, the odds are skewed towards a new potential bearish impulsive down-move sequence next, which could expose the next intermediate supports at 155.03 and 153.84 in the first step (see Fig. 3).

On the other hand, a clearance and an hourly close above 158.50 would invalidate the bearish scenario, triggering a squeeze up to retest the next intermediate resistance at 159.18/54 (20-day moving average) (see Fig. 3).

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Key takeaways JPY strength accelerates: USD/JPY fell 0.91% on 2 September and extended its decline by another 1.35% on 3 September, a move comparable with the sharp decline seen around the July US-Japan FX intervention.Fundamentals are turning more yen-supportive: US Treasury Secretary Scott Bessent’s support for decisive Japanese action, BoJ policymaker Hajime Takata’s discussion of larger or consecutive rate hikes, and renewed intervention risk have strengthened the bullish JPY narrative.200-day MA breakdown damages USD/JPY’s uptrend: The pair has broken below its 200-day MA and erased its gains since the 3 August low. Unless 158.04/50 is reclaimed, downside risk remains towards 155.03 and 153.84. In the past 40 hours, the Japanese yen has strengthened dramatically against the US dollar, a trend that began on Wednesday, 2 September 2026, when USD/JPY declined by 0.91%.

In follow-through today (Wednesday, 3 September 2026), USD/JPY has extended its losses by a further 1.35% at the time of writing (see Fig. 1).

The current decline of the USD/JPY is almost on par with the daily loss of 1.32% recorded on 31 July 2026, where Japan and the US confirmed their first joint FX intervention in around 28 years following the Japanese government’s sole intervention a day earlier on 30 July 2026, in bid to stall the steep pace of JPY weakening where USD/JPY soared to the 164 handle on 23 July 2026, its highest level in about 40 years.

Fig. 1: Daily rate of change (%) of USD/JPY with key events as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Today’s swift decline in USD/JPY smells like FX intervention, with no clear catalyst in relevant economic data releases.

However, so far, there are no official press releases from Japan or the US confirming any form of intervention, and no “according to sources” reporting from media outlets.

What we know so far… Here are the three fundamental developments to reinforce the current bout of JPY strength:

US Treasury Secretary Scott Bessent expressed support for decisive Japanese action to address yen weakness to Bank of Japan (BoJ) Governor Ueda during the G-20 finance and central bank leaders meeting last weekend, according to a readout released by the US Treasury Department on Tuesday, 1 September 2026. This reduces the political constraint on further BoJ tightening and suggests Washington is increasingly comfortable with a stronger yen.BOJ board member Hajime Takata said policymakers should consider options beyond the conventional 25-basis-point rate increase, including larger or consecutive hikes, said in a news conference on Wednesday, 2 September 2026. While Takata remains one of the BoJ’s most hawkish members, his comments increase the risk that the central bank accelerates its tightening cycle.The speed of the yen’s appreciation placed traders on high alert for another round of intervention. Although there was no immediate confirmation of official yen buying, the threat of action creates an increasingly asymmetric risk around the psychologically important 160.00 region.Let’s now unpack the short-term trajectory (1 to 3 days) of the USD/JPY from a technical analysis perspective.

Major uptrend phase of USD/JPY has been damaged, bounce before a new drop Fig. 2: USD/JPY medium-term trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Fig. 3: USD/JPY minor trend as of 3 Sep 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance. Today’s swift bearish reaction in USD/JPY comes right after the retest of a key pullback resistance level at around 160.30, a former major ascending trendline support from the 22 April 2025 low (see Fig. 2).

Today’s decline in USD/JPY has sent it below the key 200-day moving average and erased all its gains from the prior one month, since the 3 August 2026 low of 155.23 (see Fig. 2).

The current steep intraday decline in USD/JPY has pushed the hourly RSI momentum indicator into oversold territory, but there is no clear bullish divergence at this juncture (see Fig. 3).

Hence, USD/JPY may now form a potential minor dead cat bounce at the near-term support of 156.32, towards the near-term resistance of 157.30.

Watch the 158.04/50 key short-term pivotal resistance (also the 200-day moving average). If this zone is not surpassed to the upside, the odds are skewed towards a new potential bearish impulsive down-move sequence next, which could expose the next intermediate supports at 155.03 and 153.84 in the first step (see Fig. 3).

On the other hand, a clearance and an hourly close above 158.50 would invalidate the bearish scenario, triggering a squeeze up to retest the next intermediate resistance at 159.18/54 (20-day moving average) (see Fig. 3).

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About the Author

Kelvin Wong Senior Market Analyst

Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.

Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.

In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.

Based in Singapore, Kelvin Wong is a well-established senior global macro strategist with over 15 years of experience trading and providing market research on foreign exchange, stock markets, and commodities.

Passionate about connecting the dots in the financial markets and sharing perspectives around trading and investment, Kelvin Wong is an expert in using a unique combination of fundamental and technical analyses, specializing in Elliott Wave and fund flow positioning, to pinpoint key reversal levels in the financial markets.

In addition, over the last ten years, Kelvin has conducted numerous market outlook and trading-related seminars, as well as technical analysis training courses, for thousands of retail traders.

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USD/JPY short

Buy yen by selling USD/JPY (e.g., FX spot or USD/JPY CFD). BoJ hike odds are near-certain for Sept 18, Japan yields are already up, and the pair is technically broken (below 50/100-day EMAs after a rising wedge/bearish reversal). Expect continued grind lower toward 155.25, with momentum if NFP doesn’t re-ignite USD strength.

Key Risk: Fed hikes more than expected (or NFP is strong), widening the rate gap and forcing USD/JPY to bounce hard.

JPY carry unwind

Sell JPY carry risk via long JPY vs high-yield proxies: short USD/JPY and/or buy protection by selling JPY-funded risk (e.g., short JPY against NZD/AUD if available, or reduce exposure to JPY-funded EM/credit ETFs). The news raises the odds of a sustained BoJ tightening path, which makes carry trades less attractive and triggers forced unwinds.

Key Risk: Markets decide BoJ hikes are “one-and-done” while the Fed stays dovish, keeping the carry trade intact and limiting JPY gains.

The USD/JPY exchange rate dived to its lowest level in a month as the Japanese yen made a strong comeback. It dropped to 156.85, down over 4.40% from its year-high as investors predicted that the Bank of Japan (BoJ) will hike interest rates as soon as this month.

Markets are expecting the Bank of Japan to hike interest rates in its September 18 meeting. A Polymarket event contract has a 97.5% probability of this hike happening.

These odds have jumped after recent statements by senior BoJ officials, including Governor Kazuo Ueda and Deputy Governor Ryozo Himino. They have hinted that the bank will be comfortable implementing another rate hike as inflation has held steady this year.

The most recent data showed that the Tokyo CPI jumped 1.9% in August from 1.8% in the previous month. It has been in a steady increase since bottoming at 1.3% in May this year.

This trend will continue in the foreseeable future since the US and Japan have restarted their war. Iran carried out strikes against key US allies like Kuwait and Bahrain, leading to higher crude oil prices. Brent has jumped to over $95, while the West Texas Intermediate (WTI) has moved to $91. 

Japan is highly exposed to the events in the oil market because it imports from the Middle East, including countries like Saudi Arabia, UAE, Kuwait, and Qatar. Rising oil prices mean that inflation will continue rising in the coming months.

The rising BoJ hike odds comes at a time when Japan’s bond yields have soared to the highest level in years. The ten-year yield rose to 3.03%, much higher than the year-to-date low of 2.045%.

Similarly, the 30-Year rose to 4.20% before falling to 4.068% today as the odds of BoJ rate hike rose.

The challenge for the Japanese yen, however, is that the Federal Reserve is also expected to hike interest rates in the coming meetings. Odds of the Fed hiking rates in September jumped to 60% on Polymarket.

A Fed and BoJ hike would leave the differential where it is today, making the Japanese yen a popular carry trade funding currency. A carry trade is a situation where investors borrow from a low-interest-rate currency and then invest it in a high-interest-rate one. 

The next important catalyst for the USD/JPY pair is the upcoming US nonfarm payrolls data. Economists expect the economy to have added between 50k and 80k jobs in August after shedding 23k a month earlier.

USDJPY chart | Source: TradingView 

The daily chart shows that the USD/JPY crashed to a low of 156, its lowest level since August 7. This retreat happened after the pair formed a rising wedge pattern, which is made up of two ascending and converging trendlines. This pattern is one of the most common bearish reversal sign in technical analysis.

The wedge was part of bearish pennant pattern, which happens after an asset makes a big dive. It has now remained below the 50-day and 100-day Exponential Moving Averages (EMA).

Therefore, the pair will likely continue falling, potentially to the key support level at 155.25. A move below that support will point to more downside.

The USD/JPY pair remains under intense selling pressure for the second straight day and plummets to a nearly four-week low, around the 157.25-157.20 region during the early European session on Thursday.

Traders remain on high alert amid speculation that authorities had conducted a rate check, which signals the possibility of an intervention to support the Japanese Yen (JPY). Furthermore, more hawkish repricing of Bank of Japan (BoJ) rate hike expectations provides a strong boost to the JPY. This, along with a broadly weaker US Dollar (USD), is seen exerting downward pressure on the USD/JPY pair.

From a technical perspective, Wednesday's failed attempt to conquer the 200-period Simple Moving Average (SMA) on the 4-hour chart and the subsequent decline favor bearish traders. Moreover, the Moving Average Convergence Divergence (MACD) indicator is negative, while the Relative Strength Index (RSI) sits in oversold territory, suggesting persistent downside pressure on the USD/JPY pair.

Hence, some follow-through weakness below the 157.00 mark, towards testing the 156.60-156.50 horizontal support, looks like a distinct possibility. The downward trajectory could extend further toward challenging the August monthly swing low, around the 155.25-155.20 region, with some intermediate support near the 156.00 round figure.

On the topside, any attempted recovery is likely to attract fresh sellers near 158.00, which should cap the USD/JPY pair near the 158.40-158.50 pivotal resistance. The momentum might then lift spot prices beyond 159.00, towards the 200-period SMA, around the 160.00 psychological mark. Acceptance above the latter would be needed to ease the current bearish bias and signal a more sustainable rebound.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

USD/JPY 4-hour chart

Japanese Yen Price This week The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies this week. Japanese Yen was the strongest against the New Zealand Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.20%0.33%-1.73%-0.60%-0.09%1.17%0.16%EUR0.20%0.53%-1.52%-0.41%0.10%1.32%0.38%GBP-0.33%-0.53%-2.14%-0.93%-0.43%0.79%-0.24%JPY1.73%1.52%2.14%1.07%1.66%2.83%1.82%CAD0.60%0.41%0.93%-1.07%0.52%1.75%0.70%AUD0.09%-0.10%0.43%-1.66%-0.52%1.22%0.19%NZD-1.17%-1.32%-0.79%-2.83%-1.75%-1.22%-1.02%CHF-0.16%-0.38%0.24%-1.82%-0.70%-0.19%1.02% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

A significant shift has begun to emerge around the strength of the Japanese yen in the short term. Over the last two trading sessions, USD/JPY has declined by nearly 1.00%, reflecting a notable recovery in the Japanese currency. For now, this selling pressure is primarily being driven by growing expectations that the Bank of Japan could accelerate the pace of interest rate hikes. As long as these expectations continue gaining traction in the market, it is possible that downside pressure on USD/JPY remains relevant during the coming sessions.

Is the Bank of Japan Turning More Aggressive?
Expectations surrounding the Bank of Japan have changed considerably in recent weeks. This shift has been largely driven by increasing expectations of a rate hike at the September meeting following recent comments from Kazuo Ueda, who emphasized that inflation is once again moving closer to the bank's 2.00% target.

In addition, several policymakers have suggested that not only could a rate hike be justified in September, but that further adjustments may also be necessary in the months ahead. As a result, markets are currently assigning more than an 80% probability to at least a 0.25% rate increase at the next meeting.

This development comes as a relative surprise because Japan still maintains one of the lowest interest rates among major central banks, currently around 1.00%. Until recently, the dominant view was that the Bank of Japan would remain focused on maintaining monetary stability. However, the latest narrative suggests the institution could become one of the more aggressive central banks over the coming months.

Over the longer term, this shift could also improve the relative attractiveness of yen-denominated assets compared with international alternatives, a dynamic that has been largely absent during the years of ultra-low interest rates in Japan.

This change is already being reflected in the Japanese bond market. 10-year government bond yields have shown a consistent recovery following recent comments and now trade above the 3.00% level, helping strengthen the appeal of yen-denominated investments.

However, it is important to note that this is occurring alongside rising U.S. Treasury yields, which have already climbed above 4.8%. As a result, while Japanese bonds are becoming more attractive, U.S. yields continue to provide a favorable differential for the dollar that could limit part of the yen's recent advance.

Source: TradingEconomics

It is also noteworthy that the yen's recovery is taking place despite the relative stability of the U.S. dollar. The DXY Index, which measures the dollar's performance against its major peers, continues to trade near the 100-point area without showing any meaningful loss of momentum.

This suggests that markets are placing significant importance on recent comments from the Bank of Japan and that, for now, expectations of a more restrictive monetary policy in Japan are having a greater impact than the stability currently observed in the dollar. Nevertheless, it remains important to consider that a stronger recovery in the U.S. currency could continue to limit part of the yen's recent gains.

Source: TradingEconomics

Taking all of this into account, it appears that the Bank of Japan's shift in tone has been enough to support a recovery in the Japanese currency over the short term. This dynamic could continue to favor downside pressure on USD/JPY as long as the dollar and U.S. bond yields do not accelerate their recovery more aggressively.

At the same time, it is important to recognize that a more hawkish stance from the Federal Reserve could once again increase the appeal of dollar-denominated assets. Under that scenario, part of the yen's recent strength could begin to moderate and the market could return to a more balanced phase around USD/JPY.

USD/JPY Technical Outlook

Source: StoneX, Tradingview

Lack of Direction Remains Relevant: After USD/JPY moved away from the major bullish trendline that dominated much of the price action over recent months, the market entered a more balanced phase. Despite the recent strengthening of the yen, a sufficiently strong directional structure has yet to emerge on the chart. Unless price manages to break through important technical levels, this lack of direction may continue to dominate and could even open the door to a more defined period of range-bound trading.

 
RSI: The RSI remains slightly below the neutral 50 level. However, this behavior does not yet indicate aggressive selling pressure. Instead, it continues to reflect a relatively balanced environment between buyers and sellers over the last fourteen sessions. This reading supports the possibility that a period of indecision remains relevant for price action.

 
MACD: A similar picture can be observed in the MACD, where the histogram continues to fluctuate around the neutral 0 line. This behavior reflects balance in the average strength of short-term moving averages and reinforces the possibility that a neutral market environment remains an important feature of the chart in the coming sessions.

 
Key Levels to Watch:

160.889 – Key Resistance: This level coincides with the most relevant 61.8% Fibonacci retracement on the chart as well as the 50-period moving average. Price action that manages to establish itself above this area could favor the emergence of a stronger bullish bias and restore the relevance of the previous bullish structure that dominated months ago.

 
159.676 – Nearby Barrier: This level represents one of the main equilibrium zones on the chart and aligns with several important retracement areas from previous sessions. It could become the key reference to monitor should bullish corrective moves begin to emerge in the short term.

 
157.280 – Key Support: This area corresponds to recent lows and also aligns with the 200-period Simple Moving Average and the 23.6% Fibonacci retracement of the most relevant move on the chart. A sustained break below this level could reinforce a more dominant bearish bias and potentially pave the way for a broader downtrend over the coming weeks.

 
Written by Julian Pineda, CFA, CMT – Market Analyst

Follow him on: @julianpineda25

Westpac analysts expect USD/JPY to test 162 in September before retreating to 154 by end-2027 and 146 by the end of 2028. The US Dollar to Japanese Yen (USD/JPY) exchange rate slipped to 159.6004 on Wednesday, leaving Westpac's September forecast target of 162 around 1.5% above spot.

USD/JPY had climbed as high as 160.3872 during the previous 48 hours before reversing sharply, while the daily decline reached 0.37%.

Image: USD/JPY 48h chart The chart above shows the pair giving back its advance through 160.30 and finishing near the bottom of its 159.4938-160.3872 range.

Westpac's September call is effectively for one more test higher rather than an unprecedented breakout.

The pair traded as high as 163.9798 in July, so 162 has already proved reachable this summer.

What follows in Westpac's forecast curve is far more interesting.

The bank sees USD/JPY easing to 160 in December and remaining there in March 2027, before falling to 158 in June, 156 in September and 154 at the end of next year.

The decline then continues at a remarkably steady pace: 152 in March 2028, 150 in June, 148 in September and 146 in December.

From the forecast peak of 162 to the final 146 target, that would be a 9.9% fall in USD/JPY and an appreciation of almost 11% for the Yen against the Dollar.

The Yen recovery is not built on aggressive Fed cuts Westpac's accompanying interest-rate forecasts make the currency path more striking.

The bank keeps the Federal Funds rate at 3.625% throughout the forecast period, rather than relying on a sizeable US easing cycle to pull USD/JPY lower.

It also expects the US 10-year Treasury yield to ease only modestly, from 4.65% in September to 4.55% in the first half of 2027.

The yield then rises gradually to 4.85% by December 2028, precisely when USD/JPY reaches 146.

In other words, Westpac is forecasting a major Yen recovery without a lasting collapse in US yields.

The published figures do not include a separate Japanese interest-rate path or written explanation for the move, so it would be wrong to assign the decline to one specific catalyst.

Still, the curve fits a market increasingly focused on whether Japanese policy can take over from direct currency support.

As we noted in our recent Yen analysis, intervention can deliver an abrupt move but has struggled to overcome the interest-rate gap for long.

Westpac's numbers instead describe a slow adjustment lasting more than two years.

These are dated forecast points rather than promised trading stops, but the message is unusually clear: 162 may come first, while the bigger move is eventually lower.

Friday's Japanese household-spending figures and US employment report provide the next test, with Westpac forecasting a 70,000 rise in payrolls against a market estimate of 55,000.

By

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Published: Sep 1, 2026, 13:12 GMT+00:00

$160.106

+0.22%

USD/JPY eyes a breakout while AUD/USD and NZD/USD face downside setups as rising US yields support the dollar. See key forex levels to watch.

USD/JPY

+0.22%

USD/JPY ForecastAUD/USD

-0.31%

AUD/USD ForecastNZD/USD

-0.36%

NZD/USD Forecast

USD/JPY Technical Analysis

USD/JPY trades at 160.15, pushing above the 160.00 level and both converging EMAs near 159.50, after trending higher from the Aug 28 lows. Source: TradingView. The US dollar against the Japanese yen is a pair that I watch all the time. I actually have longer-term buy-and-hold positions in this, but I may be adding to this if we can break to a fresh new high somewhere around 160.33.

This is a market that I have no interest in shorting because of the interest rate differential, but there is a little bit of intervention risk here. For myself, I’ve been long of this pair for months, so this is an addition to what I already have been doing. For short-term trading, it is a viable potential breakout play. I would keep an eye on that 159.8 level, though. A breakdown below that level could signify some type of shift in momentum.

AUD/USD Technical Analysis

AUD/USD trades at 0.7144, falling below the converging 50 and 200 EMAs near 0.7156 and the 0.7150 level after a sharp selloff. Source: TradingView. The Australian dollar is a pair that I’m watching closely. If we can break down below the 0.7130 level, I might start shorting for a small move, maybe down to about 0.71, with a stop loss above 0.7160. This is an interest rate play, and the US dollar, of course, is seeing higher rates, while Australia is as well, but it’s a different ratio; it’s a different amount. The situation still favors the US dollar as far as that is concerned.

NZD/USD Technical Analysis NZD/USD drops to 0.5894, breaking below the 0.5900 level and both EMAs after declining from the 0.5980 area. Source: TradingView. The New Zealand dollar, same story. I either sell a break below the 0.5885 level, or I sell a rally that shows signs of exhaustion near the 0.5915 level. I’ll be watching this closely. The interest rate differential still favors the US dollar, and I think the real support is probably closer to the 0.5870 level. So maybe a 20-pip move. If we get a little bit of a rally and signs of exhaustion, that might open up more of like a 40-pip move.

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Chris is a proprietary trader with more than 20 years of experience across various markets, including currencies, indices and commodities. As a senior analyst at FXEmpire since the website’s early days, he offers readers advanced market perspectives to navigate today’s financial landscape with confidence.

Latest news and analysis

US Nonfarm Payrolls → USD/JPYFed Chair Kevin Warsh struck a hawkish tone at Jackson Hole, stressing that progress toward the 2.0% inflation target remains modest and reaffirming price stability as the Fed’s primary mandate. Markets responded by repricing the odds of a 25bps September hike to more than 50%, sending USD/JPY above the key 159.50 resistance toward the 160.00 psychological barrier.

However, the bulls failed to clear the 50-day EMA as the risk of FX intervention continues to hang in the background. At the same time, Warsh’s preference for data dependency over forward guidance may encourage thinner liquidity ahead of Friday’s US Nonfarm Payrolls.

Consensus expects 58k new jobs following July’s 23k decline, an unchanged 4.1% unemployment rate, and wage growth easing to 3.0% y/y from 3.2%. A downside surprise could be partly cushioned by safe-haven flows if US-Iran military tensions escalate further. Therefore, barring intervention, attention remains firmly on the 160.00 area, with a sustained break potentially opening the way toward 161.00 and then up to 162.00.

RBNZ Rate Decision → NZD/USDThe Reserve Bank of New Zealand takes center stage on Wednesday (02:00 GMT), with markets fully pricing in a back-to-back 25bps hike to 2.75%. Above-target inflation keeps hawkish forward guidance on the table, as futures markets price in an additional hike by year-end.

A hawkish policy guidance could see NZD/USD pivot off its 20-day SMA near 0.5900 to test the key 0.5990 horizontal resistance level established in May. However, the recent increase in the unemployment rate to 5.6% and anchored inflation expectations slightly above 2% may prompt the RBNZ governor to favor a gradual tightening pace. Considering geopolitical risks, which favor the US dollar, the pair could face a rocky path ahead. On the downside, fresh selling might be waiting near 0.5890.

US-Iran Conflict → GoldGold plunged to 4,396 following Warsh’s speech as the US 10-year Treasury yield surged above 4.70%, with shorter-term yields rising even faster.

Although gold remains on track for a positive monthly close, currently establishing a footing near its 20-day SMA, Friday’s sharp decline reinforces the risk of a short-term bearish pullback. Technically, the bears need a sustained break below 4,300 to trigger deeper selling towards 4,000.

Beyond the NFP data, markets will also monitor the escalating US-Iran conflict after the US attacked Iran’s Larak Island and Iran retaliated with strikes against US bases in Jordan and UAE. President Trump’s AI-generated video depicting fires on Kharg Island further suggests that Washington remains willing to combine military pressure with sanctions to force Tehran to make concessions over its nuclear program and the Strait of Hormuz.

Against this backdrop, gold has recently traded more like a risk asset than a traditional safe haven. Without renewed US fiscal or debt concerns or a potentially disappointing jobs report, elevated real yields could keep bullion vulnerable to further downside momentum.

The US Dollar (USD) is down 0.3% to near 159.65 against the Japanese Yen (JPY) during the European trading session on Monday. The USD/JPY pair declines as the Japanese currency outperforms its peers on hopes of support from the United States (US)-Japan joint intervention.

Japanese Yen Price Today The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the Australian Dollar.

USDEURGBPJPYCADAUDNZDCHFUSD-0.15%-0.03%-0.26%-0.14%0.04%-0.05%-0.14%EUR0.15%0.10%-0.09%0.00%0.15%0.11%0.00%GBP0.03%-0.10%-0.19%-0.10%0.04%-0.00%-0.08%JPY0.26%0.09%0.19%0.10%0.29%0.22%0.14%CAD0.14%-0.01%0.10%-0.10%0.19%0.12%0.02%AUD-0.04%-0.15%-0.04%-0.29%-0.19%-0.06%-0.11%NZD0.05%-0.11%0.00%-0.22%-0.12%0.06%-0.08%CHF0.14%-0.01%0.08%-0.14%-0.02%0.11%0.08% The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).

Yen intervention in focusAnalysts at Scotiabank flag that the recent “defensive price action is notable, and somewhat worrisome for policymakers at the BoJ, as well as officials at the MoF,” particularly as media reports highlight “the aggregate $96.4bn intervention effort to support the yen from July 30 to August 26.”

US Treasury Secretary Scott Bessent stated that Washington would intervene with Japan to shore up the Asia-Pacific currency, if needed. These comments came after the US and Japan jointly intervened in late July, as USD/JPY jumped to a multi-decade high near 164.00.

Meanwhile, the US Dollar trades lower, with investors shifting their focus to a slew of US economic data, starting with ISM Manufacturing PMI for August and the JOLTS Job Openings data for July releasing on Tuesday.

As of writing, the US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, trades 0.16% lower to near 99.50.

USD/JPY Technical Analysis

In the daily chart, USD/JPY trades at 159.66. The pair holds a mildly bullish near-term bias as spot remains above the 20-day exponential moving average (EMA) at 159.55, suggesting ongoing demand on dips.

The Relative Strength Index (RSI) at 49.39 sits just below the 50 mark, hinting at consolidative conditions rather than overextended momentum, but still compatible with a gradual topside bias while price holds over the short-term EMA.

On the downside, the August 19 low at 158.05 is the key support level. Looking up, the major hurdle is the Friday high at 160.20, followed by the July 31 high at 160.88.

(The technical analysis of this story was written with the help of an AI tool. Know more.)

Japanese Yen FAQs The Japanese Yen (JPY) is one of the world’s most traded currencies. Its value is broadly determined by the performance of the Japanese economy, but more specifically by the Bank of Japan’s policy, the differential between Japanese and US bond yields, or risk sentiment among traders, among other factors.

One of the Bank of Japan’s mandates is currency control, so its moves are key for the Yen. The BoJ has directly intervened in currency markets sometimes, generally to lower the value of the Yen, although it refrains from doing it often due to political concerns of its main trading partners. The BoJ ultra-loose monetary policy between 2013 and 2024 caused the Yen to depreciate against its main currency peers due to an increasing policy divergence between the Bank of Japan and other main central banks. More recently, the gradually unwinding of this ultra-loose policy has given some support to the Yen.

Over the last decade, the BoJ’s stance of sticking to ultra-loose monetary policy has led to a widening policy divergence with other central banks, particularly with the US Federal Reserve. This supported a widening of the differential between the 10-year US and Japanese bonds, which favored the US Dollar against the Japanese Yen. The BoJ decision in 2024 to gradually abandon the ultra-loose policy, coupled with interest-rate cuts in other major central banks, is narrowing this differential.

The Japanese Yen is often seen as a safe-haven investment. This means that in times of market stress, investors are more likely to put their money in the Japanese currency due to its supposed reliability and stability. Turbulent times are likely to strengthen the Yen’s value against other currencies seen as more risky to invest in.

The week in one sentence: speculative positioning shifted more constructively in the week to August 25. CAD short covering led the move, followed by a broad reduction in EUR shorts and renewed Gold buying. GBP and VIX positioning also improved, while JPY positioning deteriorated and WTI flows diverged from weaker prices.

The Canadian Dollar's (CAD) non-commercial net shorts shrank by over 36.5K contracts to about 121.5K contracts, marking the biggest weekly improvement since mid-December. In contrast, USD/CAD traded with respectable losses, with modest CAD rising as positioning improved. Furthermore, the net positioning increased to the 21st percentile.

EUR: Shorts retreat sharplySpeculative net shorts in the Euro (EUR) shrank by around 22.7K contracts to more than 36.3K contracts, the strongest weekly improvement since mid-April. EUR/USD advanced markedly, even surpassing the 1.1700 barrier for the first time since early May, confirming the more constructive flow, although net positioning remains near the 10th percentile of its five-year range.

JPY, AUD and commodities divergeSpeculators added nearly 10.4K contracts to their net short positioning of the Japanese Yen (JPY), even as JPY gathered extra pace and prompted USD/JPY to trade with modest losses. The Australian Dollar (AUD) net shorts widened by just 296 contracts, despite a solid performance from AUD/USD, which finally exceeded the 0.7100 barrier. WTI net longs increased by almost 1.4K contracts amid a decent drop in the price of the barrel. Coffee (KC1) speculative positioning increased marginally by 107 contracts alongside a humble price gain.

GBP and VIX: Confirmation strengthensNet positioning in the British Pound (GBP) improved by just over 10K contracts, while GBP/USD picked up strong upside traction well north of 1.3600 the figure. Speculators trimmed their VIX net shorts by roughly 11.3K contracts, mainly because the reduction of gross shorts more than offset the decline in gross longs; the aka “panic index” traded with a positive footing although meeting resistance around the 16.00 zone, indicating that price and positioning delivered a second confirmation signal.

Gold: Buying acceleratesGold net longs went up by more than 21.1K contracts to just over 243.3K contracts, the biggest weekly rise since June 2. The precious metal navigated with firm gains over the reporting week, confirming the stronger flow and lifting exposure to the 99th percentile of its five-year range.

Positioning Map: Gold reaches an extremeGold exposure sits near the 99th percentile, the clearest crowded long in the report. AUD exposure is also elevated near the 81st percentile. At the other end, EUR net positioning remains near the 10th percentile and WTI near the 13th, despite this week's modest increase in Oil longs.