157.50 trading range support in bears’ sights as USD/JPY hits one-week low: Price Forecast

Falling US bond yields weigh on the USD, leaving USD/JPY under heavy selling pressure on Thursday.
Support for the JPY from BoJ rate hike expectations and intervention risks adds to the pair's decline.
Further USD losses could be contained by geopolitical risks and hawkish Fed expectations, lending support to spot prices.

USD/JPY is trading near 157.70. The pair falls to a one-week low in Thursday's Asian session as broad US Dollar (USD) weakness brings it closer to the bottom of the range in place since the start of this month.

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

US bond yields continue to retreat from multi-year highs, leaving the USD Index (DXY) near the three-week low reached on Tuesday. The index measures the Greenback against a currency basket. By contrast, the Japanese Yen (JPY) is supported by hawkish comments earlier this week from Bank of Japan Governor Kazuo Ueda, who signalled room for another rate increase as early as December. That support is seen weighing on USD/JPY.

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

Below the 50.0% Fibonacci retracement at 158.47, the near-term bias for spot prices remains bearish. Negative momentum indicators reinforce the case for further declines following an intraday break below the 100-period Simple Moving Average (SMA) on the 4-hour chart. 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, suggesting limited scope for rallies.

Confirmation of the negative outlook would require a decisive break beneath trading-range support around the mid-157.00s. From there, USD/JPY could fall to 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. For any recovery, the first resistance lies 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.)

4-hour chart: USD/JPY

7 Days: US Dollar Performance

Over the last 7 days, the US Dollar (USD) performed best against the Japanese Yen. Its percentage changes against the major currencies listed are shown in the table below.

	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 changes between the major currencies appear in the heat map. Select the base currency in the left-hand column and the quote currency in the top row. To read USD (base)/JPY (quote), for example, start with the US Dollar on the left and follow its row across to the Japanese Yen. The cell at that intersection gives the percentage change for the pair.