A hawkish Federal Reserve continues to support the bullish outlook for USDJPY as the pair stabilizes near the critical 160 resistance zone. A confirmed breakout above this multi decade resistance could expose the 180 target, although the probability of Bank of Japan intervention may increase significantly at higher levels.
USD/JPY surged to a fresh two-year high after the Federal Reserve delivered a significantly more hawkish message than markets had anticipated, reviving expectations that US interest rates could rise again before year-end. While the Fed left the federal funds rate unchanged at 3.50%-3.75% as widely expected, the updated projections painted a much more inflation-focused picture.
The American currency is moving higher ahead of Fed Interest Rate Decision.
On June 16, the Bank of Japan raised its policy rate to 1.0% (7-1 vote) and confirmed a gradual taper of government bond purchases, settling at a “cruising” pace of ¥2 trillion monthly from April 2027. The message is clear: normalisation continues, as inflation risks remain skewed to the upside of the 2% target.
Our previous outlook for USDJPY still stands, as the pair continues to test the 160.20–160.60 resistance zone. Traders are closely watching this area, as the last time the market reached it, the Bank of Japan warned about possible intervention to support the yen.
USD/JPY Price Forecast: Tests 160.50 as RSI backs rally, intervention risks loom
The trading week continues, and the Japanese yen's lack of short-term strength is once again standing out. Recent USD/JPY pri.
Our previous outlook for USDJPY still stands, as the pair continues to test the 160.20–160.60 resistance zone. Traders are closely watching this area, as the last time the market reached it, the Bank of Japan warned about possible intervention to support the yen.
The USDJPY pair declined to 160.13 on Tuesday after two highly volatile trading sessions. Investors remain focused on the Bank of Japan's latest policy meeting.
USD/JPY Price Forecast: Needs breakout above 160.70 for fresh leg of rally
Fig. 1: USD/JPY minor trend as of 16 Jun 2026 (Source: TradingView). The information presented is historical information, and past performance is not indicative of future performance.
The Bank of Japan (BOJ) raised rates to 1% in June, taking its key policy rate to the highest level since 1995 in a move that markets had all but fully priced beforehand. The real questions were elsewhere.