USD/JPY Price Forecast - USDJPY Near 155.75 as BoJ Hawk Talk Puts 160 Back in Focus

USD/JPY: violent range around ¥156 with stretched upside

USD/JPY has been whipping between roughly ¥155.75 and ¥156.80–156.85 after touching a two-week high near 156.8 and then sliding back toward the 155.7–156.0 band. The spike from just under ¥156.00 to 156.8 and the subsequent rejection shows a market that is still long dollars, but increasingly sensitive to any hint that the Bank of Japan might accelerate tightening. A brief drop below ¥156.00 on the TradingView move from around ¥157.00 highlighted how thin liquidity is around the figure: once spot slipped under, it looked like a clean breakdown before snapping back above 156. That fakeout says positioning is crowded and volatility is being driven by policy headlines, not by orderly trend-following.

BoJ tightening noise versus political drag on normalisation

The hawkish push from BoJ board member Hajime Takata is not cosmetic. He argued the price stability target is essentially within reach and openly called for a “gear shift” in policy, having already dissented in January to argue for a 1.0% policy rate instead of holding at 0.75%. That rhetoric is exactly what pushed USD/JPY briefly below ¥156 as rate-differential expectations leaned marginally in favour of the yen. At the same time, politics is pulling in the opposite direction. Tokyo just nominated two clearly dovish candidates to the BoJ board, both known advocates of reflation and gradualism. Markets are still pricing roughly 17 bps of tightening by April and almost a full additional move by year-end, but the new nominations raise the risk that the committee slows down once it gets past the next hike. That combination — louder hawks at the margin, but a board that stays structurally dovish — is exactly why USD/JPY struggles to break down despite repeated intraday yen rallies.

Key battleground: 155.75 confluence with 200-SMA and 23.6% Fib

From a pure chart standpoint, the immediate pivot is the 155.75 zone on the four-hour timeframe, where the 200-period simple moving average and the 23.6% Fibonacci retracement of the 152.34–156.85 leg sit on top of each other. That confluence has already stopped the first leg of selling from the 156.80–156.85 high. As long as spot holds above 155.75 on a closing basis, the market can still argue this is a pause within a broader recovery from the 152.34 low. A clean break through 155.75, however, opens a staircase of supports lower: the 38.2% retracement near 155.15, the 50% marker around 154.60 and the deeper 61.8% level just above 154.00. Those levels align closely with the 154.45–155.00 band that has acted as both resistance and support since October. Below 154.00, the bullish narrative that started after the August unwind into the 140 handle begins to fracture.

Momentum gauges: positive bias but no conviction

Momentum is not confirming a strong directional story. The four-hour RSI has cooled back to roughly the mid-50s after briefly flirting with overbought territory near 70, signalling positive but not stretched impulse. That aligns with a MACD line that sits slightly above the signal and close to the zero axis: modest upside pressure but no strong trend. In other words, USD/JPY is not in a blow-off top, but it is also not in a clean reversal. This is where intraday levels matter more than macro narratives. Hold above 155.75 and price can revisit 156.80–157.00 quickly. Lose 155.75 and the market will likely probe 155.15 and 154.60 without much debate.

Long-term resistance: 160.00 remains the ceiling the market respects

The bigger picture is still dominated by the 160.00 barrier. That level broke the market twice. The first time, the ministry ordered intervention almost immediately after a daily close above 150.00 back in 2022, using 145.00 and 150.00 as lines in the sand. Even then, the full reversal only came once softer CPI triggered an aggressive carry unwind, erasing roughly half of a 21-month rally in three brutal months and dragging USD/JPY down to the 140.00 handle. When bulls finally punched back above the 151.95 high a year later and ran the pair to 160.00, the second defence at 160.00 worked far better. Another intervention order, again coupled with weaker inflation data, triggered a second wave of deleveraging and again the move dissolved carry structures and sent volatility indices to one of their highest spikes on record. That trauma still sits in positioning: every push toward the high-150s is shadowed by the memory of official action and forced unwind. It is no coincidence that bulls have repeatedly refused to re-test 160.00 even with US yields elevated.

Current structure: recovery from 140.00 but trapped between fear of 160.00 and 152.00 floor

Since the intervention-driven flush to roughly 140.00, USD/JPY has rebuilt a bullish staircase with higher lows, but the slope is flatter and every push above 155.00 attracts profit-taking. The 154.45–155.00 region that first capped the pair in October and switched into support in December has become the main fulcrum of this range. The latest recovery into 156.80–156.85 came after that band successfully caught a pullback earlier this week. Price is effectively boxed between that mid-150s shelf and the widely-watched 160.00 ceiling, while macro traders weigh the risk of additional BoJ hikes against the risk of another US-led yield spike.

Cross-pairs: EUR/JPY and GBP/JPY confirm that the yen leg is driving moves

The story is not just about the dollar. EUR/JPY has rebuilt a bullish structure on the four-hour chart, with initial support at 183.80, a secondary zone around 182.65–183.16 and a deeper base near 180.80–181.20. GBP/JPY is trading above the 208 region that marked the 2024 high, with current support focused around 210.00 and a secondary band near 209.60, while a more strategic floor sits around 208.10. Those structures show that yen weakness is still the dominant driver across the complex: both crosses remain elevated after the August carry unwind, and both have attracted dip-buyers at former breakout levels. The fact that EUR/JPY and GBP/JPY remain firm while USD/JPY is stuck under 160.00 tells you the constraint is not the yen alone, but the concentration of global focus on the 160 barrier in the dollar pair and the resistance cluster in the DXY.

Macro backdrop: BoJ, Fed, oil and Middle East risk pulling in different directions

Domestically, Japan has finally left deflation behind. Inflation risk is back if a weaker yen and fiscal stimulus keep feeding through into wages and services. That is the logic behind Takata’s push for a 1.0% rate and his insistence on a “gear shift.” At the same time, the government’s nomination of dovish board members signals that Tokyo does not want an aggressive tightening cycle that would choke growth or trigger funding stress. Markets are therefore pricing a slow path: roughly one modest move by April, another by year-end. On the external side, Iran-related tensions and US–Iran nuclear talks in Geneva matter for USD/JPY through two channels. First, higher crude prices threaten Japan’s terms of trade, which historically pressure the yen when oil spikes because the country is heavily dependent on imported energy. Second, any sharp escalation that hits global risk sentiment can boost safe-haven demand for the yen despite the negative trade impact. The latest move in UK gas futures to around 78 pence per therm and European TTF prices oscillating roughly between €29.8 and €35.7 per MWh in February show that energy markets are already sensitive to the Strait of Hormuz risk and to US–Iran negotiations. A genuine supply shock would hurt Japan’s current account and, in isolation, support higher USD/JPY, but a violent risk-off move could override that and drive a temporary yen squeeze as global positions are cut.

Short-term levels: what matters between 154.00 and 157.00

Near term, the market is trading a clear set of levels. On the upside, the 156.80–156.85 high and the round 157.00 figure are the first resistance band. A sustained break above 157.00 re-opens 158.50–159.00, the last zone before traders start to seriously price a run back at 160.00 and potential official pushback. On the downside, 155.75 is the immediate pivot as the 4h 200-SMA and first Fibonacci retracement. Beneath that, 155.15 (38.2%) and 154.60 (50%) form a natural support corridor, with 154.06 (61.8%) as the last technical defence of the recent leg from 152.34 to 156.85. Losing the 154.00s would turn the narrative from “controlled pullback” into “failed breakout” and invite a deeper re-test of the 152.34 base, especially if US yields soften or BoJ communication tilts more explicitly toward additional hikes.

Positioning risk: crowded longs, intervention memory and volatility

Positioning remains skewed toward dollar longs versus the yen thanks to the still-wide rate gap and the persistent search for carry. The events around the previous 160.00 interventions showed how fast that positioning can unwind when both official action and softer US inflation data hit at the same time. The VIX spike then was among the three largest ever, and USD/JPY was at the heart of the storm. That memory keeps risk managers cautious. Every time spot trades in the high-150s, desks revisit intervention risk and size positions accordingly. This is why intraday moves around 156.00–157.00 are so sharp: leverage is lower than during the pre-intervention phase, but the risk premium around key levels is much higher, so any headline on BoJ, energy, or US yields triggers outsized price swings relative to the underlying news.

Directional stance on USD/JPY: tactical Sell with defined risk

Given the current configuration, the risk-reward skew at these levels argues against chasing the upside in USD/JPY. The pair is trading only a couple of yen below the 160.00 zone that has twice invited forceful policy response and violent deleveraging. Immediate support at 155.75 is strong but fragile: a daily close below that level unlocks a relatively thin pocket down toward 155.15 and 154.60, where dip-buyers are more likely to return. Short-term momentum has already rolled over from overbought conditions, and the fundamental picture is becoming less one-sided as BoJ hawks speak more openly about moving beyond 0.75% while US dollar indices sit near resistance. The clean stance here is bearish on USD/JPY from the 156.5–157.0 region, looking for a move toward 155.15 initially and then into the 154.50–154.00 band if 155.75 gives way. Risk is defined above 157.50–158.00; a sustained break there would indicate that markets are willing to re-test 160.00 despite intervention risk, and in that scenario the tactical short thesis fails. Until that happens, upside is capped by policy memory and downside remains open as soon as the 155.75 confluence support is lost.

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