USD/JPY volatility has returned to the spotlight after a sharp yen move late in the Asian session initially raised questions over whether Japanese authorities had stepped back into the market.
USD/JPY has printed a bearish reversal candle on the four-hourly timeframe, followed by a break of the uptrend in place since August 20, with the move backed by a clear fundamental catalyst as BOJ officials continue to portray a far more hawkish outlook than what was seen earlier in the year.
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 Price Forecast: Sits near late July high; bulls retain control above 160.00
Currency markets continue to watch yields in the USA and their influence on the US dollar overall. They are rising yet again in early Tuesday trading.
USDJPY managed to resume the advance to close from the resistance at 160.85. If prices remain below this resistance, a drop towards 159.10 and 158.00 is likely.
USD/JPY Price Forecast: 20-day EMA becomes dynamic support now
EUR/USD is trading below 1.16 as the euro comes under pressure from a stronger U.S. dollar, weaker German retail sales and rising oil prices ahead of Eurozone inflation data.
USD/JPY started the week on the back foot, with the yen strengthening as Japanese front-end yields pushed to fresh multi-decade highs, coinciding with remarks from US Treasury Secretary Scott Bessent implying the BOJ may speed up the pace of rate hikes.
Summary:USD/JPY is trading around 159.75, putting the pair back within touching distance of the psychological 160 level. Japan's 10-year JGB auction on September 1 could trigger fresh volatility as investors assess demand for government debt after benchmark yields recently approached 3%.
USD/JPY Price Forecast: Faces selling pressure above 160.00
USDJPY managed to resume the advance to close from the resistance at 160.85. If prices remain below this resistance, a drop towards 159.10 and 158.00 is likely.