USD/JPY Price Forecast: Buyers challenge 160.00 as intervention risks mount

• Expectations of further Fed rate rises underpin the US Dollar, but fears of Japanese intervention restrain USD/JPY gains.
• Above its 100-day and 200-day SMAs, USD/JPY pushes beyond its recent trading range.
• Upward momentum remains firm, with RSI around 64 and MACD in positive territory.

A 0.91% advance so far this week leaves USD/JPY heading for a third consecutive weekly rise, although the pair is little changed around 160.00 on Friday. The threat of Japanese intervention is holding back further gains despite strength in the US Dollar (USD). Increasing expectations of additional Federal Reserve (Fed) rate rises continue to keep the US-Japan yield differential in the Dollar’s favour.

Speaking on Friday, Japanese Prime Minister Sanae Takaichi pledged that the government would seek to maintain an “orderly foreign exchange market,” and said Japan was keeping in close contact with US financial authorities.

Rate convergence leaves near-term yen gains limited

Expected tightening by the Bank of Japan is unlikely to provide much short-term support for the currency, according to analysts at Commerzbank. They write: “While we also expect the Bank of Japan to implement two further rate rises – in December and in spring next year – this no longer favours the Japanese yen. Rather, it signals a convergence between the central banks, which will likely have little impact on the currency,”

Commerzbank’s assessment is that “we see little potential for the Japanese yen in the near future,” with the bank observing that “in recent days, the yen has already weakened slightly due to rising market expectations regarding the Fed, and is currently trading just below USD-JPY 160.” Its outlook for the coming quarters allows for only modest gains: “by the middle of next year, we now expect only a slight appreciation towards 155.”

USD/JPY clears its range as technical momentum strengthens

After a strong recovery from September’s low of 152.89, USD/JPY moved into a tight trading range. The latest advance has carried it beyond that range and above both the 100-day Simple Moving Average (SMA) at 158.97 and the 200-day SMA at 158.74.

Just above the current price, the horizontal level of 160.00 provides the nearest resistance and remains the immediate focus. Meanwhile, a strengthening Relative Strength Index (RSI) near 64 and a positive Moving Average Convergence Divergence (MACD) reading support the upward momentum, consistent with the constructive price structure.

A lasting move through initial resistance at 160.00 would bring 161.00 and 162.00 into view as the next obstacles, with earlier selling interest likely to return at those levels. If the pair falls, buyers are initially expected around the current region, supported by the 100-day SMA at 158.97 and the 200-day SMA at 158.74. Below these, the 50-day SMA around 157.44 and horizontal support at 156.00 offer deeper support.

(The technical analysis of this story was written with the help of an AI tool. Know more.)