The USD/JPY is near the 153.325 ratio as of this writing, this after a full month of tumultuous trading in the currency pair which has led to widespread accusations and rumors regarding price fluctuations.
The USD/JPY is around the 153.325 price at this moment and is showing signs of tranquility. However, day traders who have been participating in the USD/JPY the past handful of weeks will not feel calm about the price. The past month of trading in the USD/JPY has seen a return to volatility, the type of frantic movement which has been missing in the broad Forex market for a couple of years. The move higher in the second week of January to above the 159.000 mark, and followed by some selling and a challenge to the 157.050 vicinity by the 19th of January was just the start.
On the 23rd of January the USD/JPY shot up again above the 159.000 and then it literally dove off a cliff. The key word that speculators should understand, but will not be admitted fully by the Bank of Japan is: intervention. It appears the BoJ got seriously frustrated with the weakness in the Japanese Yen which speculators were seemingly taking advantage of by buying the USD/JPY in mass. A sudden push upwards on the 23rd was met with a thunderous smack lower.
The USD/JPY Fall Back to Earth
Not only was the Bank of Japan actively involved in selling USD and buying JPY, but there are substantive rumors that the U.S government also backed the USD/JPY falling. The rumors have not been denied by U.S Treasury Secretary Bessent and serves as a strong reminder to speculators that financial institutions and particularly governments can act when they believe it is needed to protect a currency. In this case the USD/JPY had gotten too high in the eyes of the Bank of Japan and the sudden fall to the 154.000 mark on the 26th was not an accident.
Since the fast drop of the USD/JPY earlier this week, the currency pair has situated and it current price action is rather calm. How long this lower realm will be traversed is now the biggest question for day traders who have likely been scared away of trying to participate in any buying of the USD/JPY. And that ladies and gentlemen is exactly what the government of Japan wants, for speculators to be wary of trying to pursue a rising USD/JPY once again.
Central Bank Policies and the USD/JPY
The BoJ has had questionable central bank policy issues for over three decades. Financial institutions and analysts have criticized the way in which Japan has managed its economy and fiscal policy for many years.
- The BoJ is still being criticized and a bright light is shining upon the USD/JPY as it swims within what has become an established lower depth.
- The USD/JPY around the 153.000 vicinity looks oversold.
- But who wants to step in and be a buyer if they think the BoJ is capable of crushing long (buying) positions of the USD/JPY?
USD/JPY Outlook for February 2026:
Speculative price range for USD/JPY is 150.010 to 156.600
At its current values around the 153.325 mark the USD/JPY looks to be low, taking into account its fundamental stance. However, technical considerations and the potential shadow of the BoJ coordinating more attacks on speculators needs to be taken seriously. The USD/JPY above the 154.000 and even the 155.000 ratios look like legitimate targets, but participating in a buying gambit at this time is dangerous.
The U.S Federal Reserve held onto their cautious ground yesterday and did not lower their interest rate, but this might change over the mid-term. While the USD/JPY looks to be a prospective buy, day traders will need to be extremely careful and practice secure risk management. The past month in the USD/JPY is a lesson and reminder that Forex is dangerous. The threat of volatility in the USD/JPY is real and speculators pursuing the currency pair need to remain alert.