What's Going on With USD/JPY Right Now?

USD/JPY has been climbing steadily and is now trading in the ¥154 - ¥155 area. The pair recently tested resistance around ¥154.50 and is trying to break and hold above the key ¥155.00 level.

The broader picture is still bullish: the market sees strong dollar support as long as the current trend of higher U.S. yields and a soft yen remains in place.

Key Technical Levels & Possible Scenarios

Resistance zones:

• Immediate resistance sits at ¥154.50–¥155.00. A daily close above this band would confirm a breakout.
• If the breakout holds, upside targets stretch toward the ¥156.70–¥158.80 region.
• A stronger bullish extension could even push price into the ¥158–¥159 range.

Support zones & downside risk:

• On the downside, important support is seen around ¥153.00, with a deeper line in the sand near ¥152.80.
• If these levels fail, the door opens for a larger correction toward the ¥150–¥149.50 area.

What’s Driving the Move? (Fundamentals)

The story behind USD/JPY is still mostly about interest-rate differentials and policy expectations:

• Higher U.S. yields: The U.S. still offers higher interest rates than Japan, and markets expect policy to stay tighter for longer. That yield advantage supports the dollar side of the pair.
• BoJ hesitation: The Bank of Japan remains cautious about raising rates aggressively. Even small steps toward normalization have been slow, which keeps the yen under pressure.
• Fiscal policy in Japan: The Japanese government continues to lean on fiscal support, which adds to the perception of a weak yen environment.
• Global risk flows: Capital flows into U.S. assets and the general demand for USD as a liquid reserve currency help keep USD/JPY elevated, even when risk sentiment is mixed.

Japanese officials have warned about excessive yen weakness and hinted at possible intervention, but many traders believe that large-scale action is unlikely unless USD/JPY pushes closer to the ¥160 region.

What Traders Should Watch in the Coming Days and Weeks

• Daily close above ¥155.00: Confirms a technical breakout and keeps the focus on higher targets around ¥158 and beyond.
• U.S. economic data: Inflation and employment numbers will shape expectations for future Fed policy and U.S. yields.
• Japan data and BoJ communication: Any surprise signal of faster tightening, or a clear threat of FX intervention, could trigger a sharp yen rebound.
• Rate expectations (Fed vs BoJ): Shifts in the perceived policy gap can quickly change the direction of USD/JPY.
• Risk sentiment and safe-haven flows: If global risk appetite drops, safe-haven demand for JPY may strengthen, pressuring the pair lower. If risk stays firm, the bias could stay up.

Summary: Bullish Bias, But Respect the Levels

In short, USD/JPY remains in a bullish phase, trading close to a major resistance zone. A clean break above ¥155 would support the idea of a push toward the ¥158–¥159 region.

However, traders should stay flexible. A failure to hold above resistance, or a sudden shift in central-bank messaging or data, could send the pair back toward ¥152–¥150. The key is to respect the levels, size positions carefully, and avoid assuming that one trend will last forever.