The US dollar has been all over the place during fairly tight trading on Thursday, as traders try to figure out the next move for this pair.
Potential Signal: I am adding to my position here, with a stop loss at the 157.80 level. I am looking for a move to 160 above.
- We continue to look at the 158 yen level as potential support.
- The market was bullish earlier in the day, but as we’ve gone through the session in New York, things are getting a little more muted.
- The 158 yen level had previously been pretty significant resistance, so it should be support here.
- The carry trade does work out in your favor, so I think a lot of traders are just quietly shorting the yen.
Top Regulated Brokers
This trend has been very much in effect since about June of 2025, and it looks like we are going to continue to see more of the same behavior. This does make a certain amount of sense, considering that the Bank of Japan is in a situation where they cannot tighten monetary policy too much, as the debt load in Japan continues to be a major issue.
Federal Reserve Hesitancy
The United States is backed up by the Federal Reserve, and the Federal Reserve seems a little hesitant to get aggressive in cutting rates. The data is somewhat mixed, and the latest question now is that retail sales came out at 0.6% instead of the expected 0.2%, which shows that the economy is probably still going to motor right along.
With this, I like owning this pair. I’ve got no issues owning it and have owned it for quite some time. In fact, every time it dips, I look to buy more. I do believe we will go looking to the crucial 160 yen level given enough time.
Want to trade our USD/JPY forex analysis and predictions? Here's a list of forex brokers in Japan to check out.