USD/JPY Price Forecast: Bulls Defend 155 as Policy Gap Lifts the Pair Toward 158

USD/JPY holds the 155 handle as policy divergence stays intact

USD/JPY is trading around 156.2–156.4 after defending the 155.0–155.3 zone several times this week. Price action is still riding the same bullish structure that began from the April 2025 low near 149–150 and was capped by the 2025 peak around 158.8. The pair rejected support near 152–152.3 earlier in February and has since climbed back to the mid-channel area, keeping the broader uptrend intact while Trump’s tariff headlines and mixed risk sentiment generate only shallow pullbacks.

Japan’s softer inflation pushes BOJ normalization further out

Japan’s national core CPI has cooled to roughly 2.0% year-on-year, a one-year low and back on target, which undercuts the urgency for aggressive hikes from the Bank of Japan. With inflation slipping below the previous 2%+ readings and wage dynamics still uncertain, the market has pushed BOJ tightening expectations further into the future. Only around 15 bps of additional tightening is being priced by April, and the appointment of reflation-tilted board members signals preference for a gradual, data-dependent path rather than a sharp policy pivot. That backdrop keeps Japanese yields subdued and makes it difficult for JPY to mount a sustained recovery against the dollar as long as global yields remain relatively elevated.

Fed still on a slow-cut path, keeping the yield gap in USD/JPY’s favor

On the US side, the Federal Reserve message remains “later rather than sooner” on rate cuts. Fed funds futures continue to show a slower and smaller easing cycle than markets were hoping for at the start of 2026, helped by resilient US activity data and sticky service-sector inflation. That keeps the US-Japan yield spread wide across the curve. As long as the Fed holds policy restrictive while the BOJ barely lifts off the zero line, carry dynamics and rate differentials favor USD strength against JPY, even on days when the broad Dollar Index softens.

Tariff turbulence, risk rotation and why JPY safe-haven demand is underperforming

The Supreme Court’s rejection of initial tariff challenges followed by Trump’s move to re-assert broad 10% measures has capped global risk appetite, with some capital rotating toward Europe, Asia and selected emerging markets. Historically such waves of trade-policy uncertainty would have given the yen a much stronger safe-haven boost. This time, the reaction is muted because the structural story is dominated by interest-rate spreads and BOJ policy. Even as the dollar index slips intraday, JPY remains the weakest currency on the board, with USD gaining roughly 0.25–0.30% against JPY while losing ground against EUR, GBP, AUD and NZD. That relative underperformance is exactly what you expect when the market believes Japan’s normalization will be slow and heavily managed.

Structural trend: ascending channels from 2025 still control USD/JPY

On the higher-timeframe charts, USD/JPY remains inside an ascending channel drawn from the April 2025 low around 149–150, with the upper boundary near 158.8 and the lower boundary now rising through the high-140s. Price rebounded from the 152–152.3 area earlier in 2026, which lines up with the lower half of that channel, and has since climbed back toward the mid-line around 155–156. The 2025 high near 158.8 still marks the outer edge of this structure; as long as the pair trades within that band, the working assumption is that we are dealing with a trend pause or consolidation inside an uptrend, not a completed top.

Weekly pivot: 156.6–156.7 as yearly open and Fibonacci confluence

A key cluster has formed around 156.64–156.67, where the objective yearly open and roughly the 61.8% retracement of the year-to-date downswing intersect. Price is now testing that area from below. A weekly close above 156.7 would signal that the February pullback has likely run its course and that the market is ready to re-challenge the 157.7–158.1 resistance band mapped from the 2025 high-week and high-close levels. If that band breaks on a weekly closing basis, upside focus shifts back to the 158.88 swing high and ultimately the 160.7–161.9 region defined by last year’s extreme highs and prior weekly closes.

Short-term structure: 4-hour channel anchored at 152.3 with 155 as mid-line

On the 4-hour chart, an ascending channel has developed from the February 2026 low around 152.3. The mid-channel zone currently runs near 155, a level that has flipped from resistance to support over the last few sessions. The upper boundary comes in around 156.7, then extends toward 157.2 and 158.8 if momentum accelerates. As long as dips hold above roughly 154.8–155.0, the intraday structure favors continuation higher within that channel rather than a deep retracement to the February lows.

Support map: 155.0, 154.8, 153.5 and the 152.7–151.9 line in the sand

Immediate support sits at 155.0, where recent intraday pullbacks have been absorbed. Below there, 154.8 is critical as it coincides with the February open and the early-2026 low-week close; a clean break beneath that area would open room toward 153.5, which marks a short-term consolidation base and prior swing low. Deeper down, 152.7 roughly matches the 200-day EMA and prior weekly closing support. The broader bullish thesis only really comes under threat if price slices through the 151.9–152.0 band, which is built from the 2022–2023 swing highs and the 38.2% retracement of the entire 2025 rise. A weekly close below that zone would argue for a genuine trend change rather than a routine correction.

Resistance map: 156.9 first trigger, then 157.7–158.4 and 160.0+ as extension

On the topside, the first important hurdle is the recent swing high near 156.9. A daily close above that area would confirm that the latest consolidation above 155 was a pause and not a topping attempt. The next band stretches from about 157.7 to 158.4, combining last year’s high-week closes and the point where the last push higher stalled. If USD/JPY can chew through that supply zone, 158.8 comes back into view as the prior major high, followed by the psychological 160.0 level and then the 160.7–161.9 cluster of historical resistance. Those upper levels are where intervention chatter typically intensifies, so momentum beyond 160 would likely be choppy and headline-driven.

Momentum and moving averages back a controlled grind higher

Momentum indicators support the idea of a steady, rather than explosive, advance. The MACD line on the daily chart has turned back above its signal and moved into positive territory after losing traction mid-month, signaling that upside momentum is rebuilding. The RSI sits around the mid-50s, above its midline but still far from overbought, leaving room for further appreciation without requiring a reset. Price continues to respect the 200-day EMA as a springboard, with repeated rebounds from that breakout zone rather than sustained trading below it. The short- and medium-term EMAs (20- and 50-day) are curling higher again, with the 20-day below the 50-day but closing the gap, consistent with an early-stage re-acceleration inside an existing uptrend.

Macro cross-currents: CME glitches, commodity volatility and USD/JPY’s relative calm

Away from FX, the temporary halt in metals and natural gas futures trading at a major derivatives venue added a short burst of noise to commodity markets. Natural gas has already unwound a winter rally, sliding toward the $2.8–$2.9 per MMBtu area after failing to hold spikes toward $7–$7.5, and the outage briefly complicated positioning across energy and metals. Yet USD/JPY barely flinched, holding the 155 floor throughout the disruption. That relative calm underlines how strongly the pair is anchored to interest-rate expectations and BOJ communication rather than to episodic liquidity issues in other asset classes.

Event risk: Tokyo CPI, US PPI and tariff rhetoric as near-term catalysts for USD/JPY

The next macro tests come from Tokyo CPI and US PPI data into the end of the month. A weaker Tokyo inflation print would reinforce the perception that BOJ can afford to move slowly, supporting the current USD/JPY upswing. Conversely, a surprise re-acceleration would revive talk of an earlier or steeper tightening path and could drag the pair back toward the 154.8 and 153.5 supports. On the US side, a softer PPI reading would modestly ease Fed-cut skepticism but is unlikely to overturn the “higher for longer” bias unless it is paired with a broader run of weak data. Tariff headlines remain a wild card: any escalation that hits global growth expectations without shifting Fed policy could actually extend yen weakness by reinforcing the carry trade rather than boosting classic safe-haven demand.

USD/JPY stance: bullish bias, “buy-the-dip” above 154.8, downgrade only below 152

With price holding above 155, momentum turning higher, Japan’s inflation cooling and BOJ tightening expectations fading, the balance of evidence still favors a bullish view on USD/JPY. While price stays above roughly 154.8, dips into 155–155.5 look more like opportunities to add long exposure than signals of a top, with a reasonable upside zone at 157.7–158.8 and an extension path toward 160. A break of 154.8 would downgrade the short-term tone to neutral and shift attention to 153.5 and 152.7 as the next decision areas. Only a decisive weekly close below 151.9 would justify shifting the broader bias to bearish. Until that happens, the dominant theme remains a controlled grind higher, powered by rate-differential support and a central bank in Japan that is in no hurry to challenge that trend.

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