USD/JPY Price Forecast: Retreats below mid-159.00s; bullish potential seems intact
Hajime Takata dissented again, saying inflation is effectively at target and warning that rising import costs mean the Bank should already be running a higher rate.
The US dollar extended its rally after the Federal Reserve held rates steady, reinforcing a “higher for longer” narrative as inflation risks remain elevated. Rising yields have underpinned USD strength, while safe-haven flows have shifted away from the yen and Swiss franc.
USD/JPY jumps and eyes 160.00 as Fed hawkishness lifts US Dollar
Jerome Powell didn't feed the doves at today's presser even though the FOMC projections issued at 2PM ET didn't seem all too hawkish. While the Fed is looking for higher levels of inflation than they were at the last quarterly rate decision in December, they also boosted forecasts for growth this year while maintaining the expectation for the unemployment rate at 4.4%.
Oil market rally provided additional support to the American currency.
The Bank of Japan (BoJ) is likely to keep the policy interest rate unchanged at 0. 75% when it concludes its two-day monetary policy meeting on Thursday, 19 March 2026, as the current elevated oil prices due to a prolonged US-Iran conflict stoke stagflation risk.
The Bank of Japan is expected to hold rates at 0.75% as it navigates stagflation risks driven by the US–Iran war 2026. Despite weak sentiment reflected in the Nikkei 225, rising wages support a tightening bias.
The pair managed to drop and still faces resistances around 160.20 and 161.95, where each resistance could push for a correction towards the 157.25-65 zone. Above 161.95, the market could enter a new uptrend wave with the first target toward 163.80.
USD/JPY is caught in a real conundrum at present and continues to edge lower ahead of a crucial pair of central bank meetings. The pair trades at 158.90 right now as the 160.00 handle still remains elusive.
USD/JPY nears 160.00 amid a high-stakes "central bank double-header." This analysis details the Fed and BoJ's upcoming decisions, potential rate impacts, and key scenarios that could trigger FX intervention by the Japanese Ministry of Finance this week.
USD/JPY Edges lower for second day as traders brace for Fed and BoJ