The Japanese yen continues to face challenging conditions in the short term. By the end of the week, USD/JPY had gained nearly 2.00% over the previous five trading sessions, highlighting ongoing weakness in the yen and showing that the U.S. dollar continues to gain ground.
The American currency is moving higher, supported by rising Treasury yields.
The US dollar remained largely supported heading into the final hours of an action-packed week. The Fed was hawkish, the dollar rallied then sold off, then bounced back again.
USDJPY managed to meet targets 156.75 and 157.40 and move higher. The pair is still showing the ability for more advance towards the 159.50-160.00 zone.
USD/JPY Price Forecast: Yen plummets after BoJ's policy outcome
TL;DR: USD/JPY is testing 157.11 as one widening policy differential, not two separate stories—the Fed is accelerating into a new tightening phase while the BoJ's divided vote reduced the odds of a back-to-back hike, both reinforcing the same Dollar-favorable repricing.
The Japanese yen continued its strong downward trend, reaching its lowest level since September 3 as traders reflected on the latest Federal Reserve and Bank of Japan (BoJ) interest rate decisions. The USD/JPY pair rose to 157.03, up sharply from this month's low of 152.90.
The US Dollar formed a base above 153.00 against the Japanese Yen. USD/JPY recovered above 154.00 and 154.50 to enter a short-term positive zone.
USD/JPY remains the center of the FX market and after yesterday's hawkish hike from the FOMC, the pair extended it's recent rally to run above the 155.00 level.
The American currency is losing ground as traders take some money off the table after the strong move.
USDJPY moved higher to close towards the resistance zone at 156.75-157.40. As we see over the chart the market is facing a support zone around 153.90-154.40, where as long as prices hold above it, a chance for more advance towards the 156.75-157.40 resistance zone is likely.