A Bank of Japan monetary policy meeting is due this week, and expectations around the decision are supporting the yen today. Traders increasingly believe that the central bank may raise its policy rate by 25 basis points to 0.75%.
Moreover, according to Trading Economics, analysts expect the interest rate to reach 1% by July 2026. Senior officials in Prime Minister Sanae Takaichi’s cabinet are also unlikely to oppose tighter policy, as an excessively weak yen could drive up import costs and fuel inflation.
Technical Analysis of the USD/JPY Chart
The chart shows USD/JPY moving lower today towards the important support level at ¥155 per dollar. Earlier this month, bears attempted to break below this level but failed to gain leading momentum.
Notably, market fluctuations since October have formed an ascending channel. Within this framework:
→ the channel median has twice acted as resistance, a bearish signal;
→ the price is currently near the lower boundary of the channel, which may serve as strong support.
Given these factors, it is reasonable to assume that expectations of tighter monetary policy could lead to a break below the combined support formed by the lower channel boundary and the key 155.00 level. If this occurs, the area could turn into resistance, opening the way for USD/JPY to move towards the next major support near ¥150 per dollar.
Trade over 50 forex markets 24 hours a day with FXOpen. Take advantage of low commissions, deep liquidity, and spreads from 0.0 pips. Open your FXOpen account now or learn more about trading forex with FXOpen.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
