USD/JPY Price Forecast: Can the pair climb back above the 20-day EMA?

Japanese Yen weakness lifts USD/JPY further towards 157.80.
This week’s policy meetings are expected to see both the Fed and the BoJ leave interest rates unchanged.
A rate increase is anticipated at the BoJ’s December policy meeting.

The Japanese Yen (JPY) remains weaker than its peers as caution prevails ahead of Friday’s monetary policy announcement from the Bank of Japan (BoJ). Against the Japanese currency, the US Dollar (USD) has gained 0.22% to around 157.80 during Tuesday’s European trading session.

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How Is the Japanese Yen Performing Today?

The Japanese Yen recorded its weakest performance against the New Zealand Dollar today. Its percentage changes against the major currencies listed are set out in the table below.

	USD	EUR	GBP	JPY	CAD	AUD	NZD	CHF
USD		0.13%	0.14%	0.19%	0.07%	0.01%	-0.17%	0.06%
EUR	-0.13%		0.00%	0.07%	-0.04%	-0.12%	-0.31%	-0.07%
GBP	-0.14%	-0.01%		0.06%	-0.07%	-0.12%	-0.31%	-0.07%
JPY	-0.19%	-0.07%	-0.06%		-0.13%	-0.19%	-0.37%	-0.15%
CAD	-0.07%	0.04%	0.07%	0.13%		-0.05%	-0.24%	-0.01%
AUD	-0.01%	0.12%	0.12%	0.19%	0.05%		-0.18%	0.05%
NZD	0.17%	0.31%	0.31%	0.37%	0.24%	0.18%		0.24%
CHF	-0.06%	0.07%	0.07%	0.15%	0.00%	-0.05%	-0.24%

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

Could a December hike support the Yen as the BoJ is expected to pause on Friday?

A cautious approach from Governor Kazuo Ueda underpins the assessment by analysts at Brown Brothers Harriman (BBH), who say the Bank of Japan is "widely expected to keep rates on hold at 1.25% and assess September’s 25bps hike before tightening again." Recalling his earlier remarks, they stress that "in September, BoJ Governor Kazuo Ueda warned that rapid rate hikes could unsettle asset prices, adding that it could take some time to confirm that 2% inflation is entrenched."

Market expectations for monetary policy have shifted in a more hawkish direction, according to BBH, which notes that "the swaps curve price in 75% odds of a 25bps BoJ rate hike to 1.50% at the December 18 meeting and nearly 75bps of tightening in the next twelve months."

Wednesday’s monetary policy announcement from the Federal Reserve (Fed) will be the key catalyst for USD/JPY before the BoJ delivers its decision. The CME FedWatch tool indicates that the Fed is almost certain to retain interest rates within the 3.75%-4.00% range. Commentary on inflation and the economic outlook will be closely watched by investors.

At the time of writing, a 0.16% gain has taken the US Dollar Index (DXY) to near 102.20. The index tracks the Greenback against six major currencies.

Can USD/JPY Sustain Its Technical Upward Bias?

A mildly bullish near-term outlook remains in place on the daily chart, where USD/JPY is trading at 157.86, above its 9-period exponential moving average (EMA) of 157.69. This short-term trend indicator continues to support the price. At around 51, the Relative Strength Index (14) points to neutral-to-positive momentum: buyers appear to hold a slight edge, without the pair entering overbought territory.

A break below immediate support at the 9-period EMA of 157.69 would be needed to indicate a deeper correction to the current advance. The latest dataset identifies no nearby technical resistance, leaving the outlook tilted towards further gains while the pair remains above this moving average. Fresh highs, however, would likely prompt closer examination of momentum for signs that the advance is losing strength.

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

Which Economic Indicator Is in Focus?

What Does the Fed Interest Rate Decision Signal?

At eight scheduled meetings each year, the Federal Reserve (Fed) reviews monetary policy and decides on interest rates. Keeping inflation at 2% and maintaining full employment form its dual mandate. To pursue these objectives, it primarily sets the rates at which it lends to banks and at which banks lend to one another. A rate increase tends to support the US Dollar (USD) by drawing in more foreign capital. A reduction, by contrast, generally weakens the USD as capital moves towards countries offering better returns. When rates stay unchanged, markets focus on the language of the Federal Open Market Committee (FOMC) statement: a hawkish tone signals expectations of higher future interest rates, while a dovish tone signals expectations of lower future rates.

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Upcoming release: Wed 28 Oct 2026 18:00

Release frequency: At irregular intervals

Consensus estimate: 4%

Previous reading: 4%

Data source: Federal Reserve