USD/JPY Price Forecast: USDJPY=X 155.50 Pivot Before BoJ Hike and US CPI

USD/JPY Trades Around 155.5 as Dollar Regains Ground

USDJPY=X Price Snap Shot - 17TH December 2025

USD/JPY is rotating around 155.40–155.60 after a sharp intraday rebound, with moves of roughly +0.5% from the earlier lows. The pair briefly dipped under the 155.00 line and then pushed back toward 155.50 as the US Dollar recovered alongside higher Treasury yields. The Dollar Index is up about 0.4% near 98.60, pulling USD/JPY higher even though the latest US labour data painted a softer growth picture and pushed unemployment to a four-year high at 4.6%. The tape is the definition of two-way: yen strength from looming Bank of Japan tightening collides with a firmer dollar into US CPI and keeps USD/JPY locked in a wide 154–156 band rather than trending cleanly.

US Labour Slowdown, 4.6% Unemployment and Sticky Yields Shape the Dollar Leg

The US side of USD/JPY is driven by a labour market that is clearly cooling but not collapsing. Headline payrolls rose by 64,000 jobs, better than the 50,000 consensus, yet that headline strength was offset by deeper revisions: the prior month was cut to a 105,000 decline and earlier data were trimmed as well. The unemployment rate has climbed to 4.6%, its highest level in roughly four years, and wage growth has slowed to around 0.1% month-on-month. That combination signals a gradual loosening in labour conditions, which in theory gives the Federal Reserve space to ease policy further out. Markets are now pricing more cuts into 2026, which caps how far the dollar can extend. At the same time, yields are not collapsing. Two-year Treasuries trade near 3.51%, the ten-year around 4.178% and the thirty-year close to 4.845%. That yield structure keeps the US carry advantage intact versus Japan even as the Fed has already executed three rate reductions and is widely expected to hold the 3.50–3.75% band at the next meeting. For USD/JPY, this means the dollar is firm enough to prevent an outright yen squeeze, but not strong enough to justify a clean breakout beyond the recent 155–157 zone without fresh data.

BoJ Normalisation and the 155 Intervention Line Define the Yen Story

On the yen side, USD/JPY trades under the constant shadow of policy normalisation and intervention risk. Markets expect the Bank of Japan to raise its policy rate by 25 basis points from 0.50% to 0.75%, taking Japanese rates to their highest level in around three decades. Officials have signalled that domestic inflation is moving closer to the 2% target, wage growth is improving and business sentiment has firmed, which justifies stepping away from ultra-easy settings. That shift reduces the policy gap with the Fed at the margin and supports JPY on a structural basis. At the same time, 155.00 in USD/JPY has been described in the past by Japanese policymakers as a de facto “line in the sand” for intervention risk. The market has internalised that message: 155 has repeatedly acted as both resistance and support, and every approach to or break through that level now triggers heightened sensitivity to possible official action. The first daily close below 155 in about a month signalled that yen buyers were finally willing to lean harder, but the subsequent bounce back toward 155.50 shows that policy expectations alone are not enough to drive a straight-line JPY rally as long as US yields stay elevated.

Cross-Asset Flows and Macro Tape: Risk Assets Rally While FX Splits

The broader risk environment is mixed but generally supportive for higher-beta assets, which tempers haven demand for the yen. US equity futures point to a firmer open with Dow Jones contracts implying roughly an 82-point gain, S&P 500 futures up about 18.5 points and Nasdaq futures ahead by around 97 points. In Europe, the UK’s FTSE 100 outperforms with a gain near 1.48%, while Germany’s main index is marginally negative around –0.06% and France’s benchmark slips about –0.23%; Italy and Spain trade modestly positive with moves of roughly +0.47% and +0.26%. Commodities add another layer to the story: silver jumps about 3.45% to the $65.92 area, gold holds near $4,317.79 with a gain around 0.36%, and US crude trades close to $56.22, up roughly 1.92%. Bitcoin is under pressure around $86,994, down just under 1%. In FX, the dollar is stronger but selectively so: EUR/USD trades near 1.1714, down about 0.26% on the day but holding above the 1.1700 figure and a key midpoint at 1.16929, while GBP/USD is the weakest major around 1.3335, down roughly 0.63% after UK inflation surprised to the downside with headline CPI falling to 3.2% from 3.6%. For USD/JPY, this backdrop means the dollar leg is supported by higher yields and relative growth, but the yen retains a role as a hedge against China slowdown risk and stretched AI-equity valuations, limiting upside beyond the mid-150s.

Short-Term Structure in USD/JPY: Between 4-Hour Moving Averages and a Rising Trendline

Short-term price action in USD/JPY is defined by a tug of war around the mid-155s. On the four-hour chart the pair trades between the 200-bar moving average around 155.265 and the 100-bar moving average near 155.700, with sellers repeatedly leaning against the upper band and buyers defending dips into the lower one. Earlier in the week, the first close below 155 in a month and a push down toward 155.00–155.40 hinted that bears were finally gaining some control, but the long lower wicks on recent candles show that dip-buyers are still defending a rising trendline that extends back to late October. Momentum gauges fit the same picture: a short-term RSI reading around 56 signals consolidation rather than a blow-off top or an outright breakdown. As long as USD/JPY remains pinned between these four-hour averages, the market is effectively coiling around a pivot, waiting for either the BoJ or US data to deliver the next decisive impulse.

Key Levels: 154.3–155.0 as Demand, 156.3–156.95 as Supply for USD/JPY

The level map for USD/JPY is unusually clean. On the downside, immediate support sits around 155.00, where intraday buyers have already stepped in several times. Below that, the 154.35–154.34 area marks the next line in the sand; a break through there would open room toward the monthly S1 pivot near 153.28, a logical magnet if BoJ guidance turns more hawkish than expected or if US data disappoints badly. On the topside, initial resistance stands around 156.30, where prior rallies stalled, followed by a more substantial cap near 156.95, which would represent a full retracement of the latest pullback from the 155.00 region and test the patience of Japanese officials watching volatility. Short-term momentum and the position of the 50- and 100-period exponential moving averages near 155.46 and 155.48 argue that the very near-term bias remains neutral to mildly positive while price holds above those averages. Traders looking to express that view have been using dips into the 155.00 zone to build longs with stops just under 154.35 and upside targets closer to 156.30–156.95, effectively risking roughly 65–70 pips to pursue 130–195 pips, but that structure depends heavily on central-bank messaging in the next 48 hours.

BoJ, Fed and CPI: Event Cluster Will Decide Whether 155 Breaks or Holds

Event risk is front-loaded and directly tied to USD/JPY. The immediate catalyst on the US side is the November CPI release, where both the headline and core readings are expected to print near 3.0% year-on-year. An outcome in the 3.0–3.1% band would validate the current rate path and keep Fed policy stable, supporting the existing yield structure and a broadly firm dollar. A softer print would drag yields lower, undercut the Dollar Index from the 98.60 area and provide fuel for a deeper USD/JPY correction through the 155.00 and 154.35 floors. On the Japanese side, the market is almost fully conditioned for a 25-basis-point BoJ hike to 0.75%. The rate move itself is less important than the guidance: a message that stresses caution, one-and-done rhetoric and patience would dull the hawkish edge and allow USD/JPY to hold or even extend above 155.50 if US data cooperate. By contrast, explicit hints at further tightening or stronger language around yen weakness and volatility would amplify intervention risk and make any move toward 156.30–156.95 an opportunity for JPY bulls to press shorts rather than chase the trend.

BoJ, Fed and CPI: Event Cluster Will Decide Whether 155 Breaks or Holds

Event risk is front-loaded and directly tied to USD/JPY. The immediate catalyst on the US side is the November CPI release, where both the headline and core readings are expected to print near 3.0% year-on-year. An outcome in the 3.0–3.1% band would validate the current rate path and keep Fed policy stable, supporting the existing yield structure and a broadly firm dollar. A softer print would drag yields lower, undercut the Dollar Index from the 98.60 area and provide fuel for a deeper USD/JPY correction through the 155.00 and 154.35 floors. On the Japanese side, the market is almost fully conditioned for a 25-basis-point BoJ hike to 0.75%. The rate move itself is less important than the guidance: a message that stresses caution, one-and-done rhetoric and patience would dull the hawkish edge and allow USD/JPY to hold or even extend above 155.50 if US data cooperate. By contrast, explicit hints at further tightening or stronger language around yen weakness and volatility would amplify intervention risk and make any move toward 156.30–156.95 an opportunity for JPY bulls to press shorts rather than chase the trend.

USD/JPY Stance: Hold With Bearish Tilt Above 155 and a 153.3–156.9 Trading Envelope

Taking the full picture together—US labour softening with unemployment at 4.6% and wages near 0.1% month-on-month, Treasury yields still elevated at 3.51% on the two-year and 4.178% on the ten-year, a BoJ on the verge of lifting rates to 0.75% for the first time in decades, and a USD/JPY tape rotating between 155.00 support, 154.35 secondary demand and 156.30–156.95 resistance—the pair aligns best with a Hold stance, not a clean Buy and not a high-conviction Sell. From roughly 155.5, the immediate downside into 154.35 represents about 70–80 pips of risk, with a deeper extension toward the 153.28 pivot adding another 100 pips if BoJ rhetoric or US CPI breaks in favour of the yen. On the upside, a push to 156.30 offers around 80 pips and a move to 156.95 about 140 pips, but every tick higher inside that band increases the probability of jawboning or actual action from Tokyo. That payoff profile argues for treating USD/JPY as a high-volatility range trade inside roughly 153.3–156.9 with a bearish bias above 155: rallies into the upper half of the range are better used to lighten dollar longs or build tactical yen exposure, while deeper dips toward the low-153s would start to look attractive again for carry-driven buyers if US yields and Fed expectations stay broadly intact.

That's TradingNEWS