BoJ

USD/JPY gives back the rally from the start of the week as the Federal Reserve still plan to further unwind its restrictive policy in 2025.

With the US Federal Reserve to make its own policy announcement later, the USD/JPY outlook could take a new direction in the near-term, as the pair continues to test a major resistance zone near the 150.00 area.

USDJPY, DXY Forecast: The Bank of Japan (BOJ) held interest rates at 0.5% as expected, amid tariff uncertainties, while the U.S. Dollar Index (DXY) remains near its 2025 lows ahead of the FOMC outlook, keeping markets on edge.

We have two powerhouse central bank meetings lined up over the next 24 hours. While neither the BOJ or Fed are expected to change policy, the FOMC release their updated forecasts which will provide the first glimpse of their expectations of Trump's tariffs. Implied volatility for USD/JPY is, quite rightly, elevated.

With both the Bank of Japan and US Federal Reserve to make policy announcements, the USD/JPY forecast could take a new direction in the near-term outlook, as the pair tests a major resistance zone near the 150.00 hurdle.

USD/JPY may stage a larger rebound ahead of the Bank of Japan (BoJ) meeting as the central bank is expected to keep interest rates on hold.

USDJPY retested the 150 zone for the first time since December 2024, alongside a rise in 10-year government bond yields to 16-year highs. Meanwhile, EURUSD remains above 1.04 ahead of upcoming Flash PMI releases.

The yen’s fate may rest on Friday’s inflation report, with growing evidence that Japan’s economy is running hotter than expected. Are markets underpricing the risk of a BOJ hike?

Major central banks may further adjust monetary policy in 2025 as the European Central Bank (ECB) insists that ‘the disinflation process is well on track,’ but the Federal Reserve may change gears at a slower pace as Chairman Jerome Powell and Co. forecast less rate-cuts for next year.

USD/JPY has risen by approximately 8% since late October, primarily favoring the US dollar and pushing the yen into a constant bearish zone.

Traders are now pricing in 50/50 odds for both a BOJ rate hike and a Fed rate cut in December, setting USD/JPY up for volatility around key economic reports.

USD/JPY may further retrace the decline from the yearly high (161.95) as BoJ Governor Kazuo Ueda insists that ‘monetary policy will continue to firmly support economic activity.’

USDJPY, Silver Forecast: The US Dollar’s rally has pushed the yen to levels increasing Bank of Japan intervention risks and pressured silver to retest a critical yearly trendline, raising caution over potential further upward movements in the dollar.

USDJPY Forecast: The bull run of the US Dollar Index has pushed the USDJPY back in the borders of its primary uptrend, and further volatility risks are on the horizon with the US CPI results.

USDJPY Forecast: Bearish pressures on the yen have amplified following Japan's first political shift in 15 years. With the yen’s current weakness, heightened volatility is expected ahead of the BOJ policy decision, US elections, and the Fed rate decision.

USD/JPY has rallied more than 1,000 pips since mid-September, helped along by a surge in the 2yr yield spread between the US and Japan...but can it build on those gains from here?

USDJPY Forecast: The DXY’s weakness is set to face a key test this week with the release of leading US economic indicators and non-farm payroll reports. Both the DXY and USDJPY are approaching critical support levels, one step away from a decline towards the July 2023 lows.