USD/JPY Price Forecast: Bears target trading range support near 157.50 as pair falls to one-week low

Heavy selling weighs on USD/JPY on Thursday, with falling US bond yields keeping the USD under pressure.
The pair faces additional pressure as expectations of a BoJ rate hike and the risk of intervention lend support to the JPY.
The USD could find a floor from geopolitical risks and hawkish Fed expectations, potentially cushioning spot prices.

Selling pressure pushes USD/JPY to a one-week low in Thursday's Asian session as broad-based weakness weighs on the US Dollar (USD). The pair is currently trading around 157.70, near the bottom of the range it has maintained since the start of this month.

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

With US bond yields continuing their recent retreat from multi-year highs, the USD Index (DXY) remains close to the three-week low reached on Tuesday. The index measures the Greenback against a basket of currencies. By contrast, the Japanese Yen (JPY) benefits from hawkish comments made earlier this week by Bank of Japan Governor Kazuo Ueda, who indicated room for another rate increase as early as December. These contrasting influences are seen weighing on USD/JPY.

Nevertheless, the probability priced in by traders for another increase in borrowing costs by the US Federal Reserve (Fed) before the end of this year remains around 90%, reflecting inflation concerns linked to volatile energy prices. Further escalation in Middle East tensions is also keeping the geopolitical risk premium firmly supported. This could underpin the safe-haven Greenback and contain USD/JPY losses, with attention now turning to next week's key central bank events.

Below the 50.0% Fibonacci retracement at 158.47, the near-term outlook for spot prices remains bearish. Negative momentum indicators, together with an intraday break beneath the 100-period Simple Moving Average (SMA) on the 4-hour chart, strengthen the case for additional declines. A Relative Strength Index (RSI) reading of 38.24 points to fading momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) line remains negative and below zero, indicating that rebounds are likely to face limits.

Confirmation of the bearish outlook would, however, require a decisive break below support at the trading range's lower boundary, near the mid-157.00s. Such a move could take USD/JPY towards the 38.2% Fibo. level at 157.15, followed by the 23.6% retracement near 155.52 and the swing-low anchor around 152.88. Any recovery would initially encounter resistance at the 100-period SMA at 158.07. Together with the nearby 50.0% retracement at 158.47, this creates a narrow supply zone before the 61.8% retracement at 159.79 and the 78.6% level at 161.66.

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

USD/JPY: What does the 4-hour chart show?

How Has the US Dollar Performed Over the Last 7 Days?

The US Dollar's strongest performance over the last 7 days was against the Japanese Yen. The table below sets out the percentage changes in the US Dollar (USD) against the major currencies listed for this period.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		-0.81%	-1.53%	-0.35%	-1.43%	-0.63%	-1.68%	-1.50%
EUR	0.81%		-0.75%	0.44%	-0.70%	0.19%	-0.88%	-0.74%
GBP	1.53%	0.75%		1.18%	0.11%	0.93%	-0.21%	0.06%
JPY	0.35%	-0.44%	-1.18%		-1.02%	-0.25%	-1.33%	-1.11%
CAD	1.43%	0.70%	-0.11%	1.02%		0.76%	-0.32%	-0.01%
AUD	0.63%	-0.19%	-0.93%	0.25%	-0.76%		-1.06%	-0.84%
NZD	1.68%	0.88%	0.21%	1.33%	0.32%	1.06%		0.17%
CHF	1.50%	0.74%	-0.06%	1.11%	0.01%	0.84%	-0.17%

Percentage movements between the major currencies are displayed in the heat map. To read a currency pair, select its base currency from the left-hand column and its quote currency from the top row. For instance, selecting the US Dollar on the left and following that row across to the Japanese Yen gives the percentage change for USD (base)/JPY (quote) in the corresponding cell.