Current trend

The USD/JPY pair has been falling for the fourth week in a row, reaching four-month lows around 150.00, amid the Bank of Japan’s decision to raise the interest rate from 0.10% to 0.25%, while most experts expected this to happen no earlier than autumn.

The measures taken are justified by the continuing growth in wages, as a result of which companies are passing on costs to consumers, and now the cost of borrowing has reached a high since 2008. Nevertheless, the regulator’s representatives said that financial conditions remain easy enough to provide further support for economic activity, and announced forecasts for core inflation, according to which its level by the end of the current fiscal year will be 2.5% and 2.0% in 2025 and 2026. Officials have signaled the possibility of further monetary tightening if inflation continues to rise, and experts expect at least one more increase in borrowing costs within a year.

The US regulator may move towards easing monetary policy, which will put additional pressure on the dollar. Today at 20:00 (GMT 2), the two-day meeting of the US Fed will end, during which the interest rate is likely to remain at 5.50% but there may be signals about the possibility of reducing borrowing costs in September. Overall, the difference in monetary approaches between the Japanese and American regulators should ensure a further decline in the USD/JPY pair soon.

Support and resistance

The trading instrument tested the 150.00 mark (Murrey level [0/8]), consolidation below which will allow it to reach the area of ​​148.43 (Murrey level [–1/8]) and 146.87 (Murrey level [–2/8]). In case of consolidation above the 156.25 mark (Murrey level [4/8]), growth to the area of ​​159.37 (Murrey level [6/8]) and 162.50 (Murrey level [8/8]) is expected.

Technical indicators confirm the continuation of the downward trend: Bollinger Bands and Stochastic are directed downwards, and the MACD histogram is increasing in the negative zone.

Resistance levels: 156.25, 159.37, 162.50.

Support levels: 150.00, 148.43, 146.87.

Trading tips

Short positions may be opened below 150.00, with the targets at 148.43, 146.87 and stop loss 151.10. Implementation period: 5–7 days.

Long positions may be opened above 156.25, with the targets at 159.37, 162.50, and stop loss 155.20.