USD/JPY Price Forecast - Dollar-Yen Tests 150.00 as Payrolls and Fed Bets Drive Momentum

USD/JPY Price Forecast - Dollar-Yen Tests 150.00 as Payrolls and Fed Bets Drive Momentum

The yen weakens as USD/JPY pushes above ¥149.50, with traders eyeing ¥151.22 if U.S. jobs data confirm economic strength | That's TradingNEWS

TradingNEWS Archive 9/27/2025 8:54:49 PM
Forex USD/JPY USD JPY

USD/JPY Correlation with Fed Policy Tightens as Pair Holds 149.00–150.00

The USD/JPY currency pair has remained glued to the trajectory of Federal Reserve rate expectations, with Fed funds futures correlations running at -0.94 through September 2026. That means every adjustment in rate cut bets translates almost directly into yen movement. After reclaiming the 200-day moving average and powering above 149.00 this past week, the pair is testing the critical 150.00 threshold, with resistance stacked at 151.00 and 152.40. A decisive break of 150.90, the July peak, would mark a full resumption of the uptrend from the August low at 139.87, with Fibonacci alignment at 151.22 signaling the next key marker.

Payrolls Data Looms as Make-or-Break Catalyst for USD/JPY

The September nonfarm payrolls report due Friday is the clear pivot point for USD/JPY price action. Recent economic surprises, including stronger U.S. personal income and spending, have tilted to the upside, but traders remain cautious about a downside shock. A strong payrolls print coupled with a firm unemployment rate would scale back cut expectations and fuel another surge through 151.00. Conversely, a weak reading would revive deeper cut pricing and likely drag the pair back to 148.80 support. Before payrolls, ADP jobs, JOLTs, ISM manufacturing, ISM services, and weekly claims all have the power to stir volatility, though none are likely to overshadow the official payroll data.

Japanese Fundamentals Take a Back Seat as Tokyo CPI Softens

While U.S. macro remains the driver, Japan’s domestic story continues to provide context. Tokyo CPI undershot expectations, hinting that inflationary pressure may be easing. That gives the Bank of Japan more room to watch data before pressing ahead with hikes, even as two policy board members dissented in favor of tightening at the last meeting. The release of the BoJ’s summary of opinions could add intrigue, but unless there is clear hawkish deviation, USD/JPY will stay locked to U.S. labor data and Treasury yields.

Technical Levels Signal Bulls in Control but Risks of Pullback Persist

Technically, USD/JPY’s reclaim of the 200DMA has reset the bullish outlook, but caution lingers given past failures above this level. RSI (14) remains in overbought territory, while MACD momentum continues to slope upward. Immediate support is reinforced at 149.00, followed by a cluster near 148.80. On the upside, a daily close beyond 150.90 would open 151.22 before setting the stage for 152.40. If buyers fail to sustain momentum, pullbacks could target 148.00 or deeper retracements toward 145.50, the September low.

Big Picture: USD/JPY Holds Medium-Term Uptrend Above 139.00

From a structural perspective, USD/JPY’s multi-year trend from the 2021 low at 102.58 remains intact. The correction from last year’s 161.94 high may have already bottomed at 139.87, with the breakout through 149.12 reinforcing that interpretation. As long as 139.00–139.20 holds, the bullish bias for a retest of 161.94 is preserved. A failure back below 139.00 would suggest the corrective wave is not yet complete, but that scenario looks less likely given current U.S. economic resilience.

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