USDJPY Recovers Above 157 as Traders Await Fed and BOJ Decisions

Key Points

• USDJPY trades at 157.061, recovering from an earlier dip below 156.90.
• Lower US Treasury yields weighed on the broader dollar, while reported de-escalation efforts helped oil retreat from six-month highs.
• The Federal Reserve and Bank of Japan decisions could shift expectations for the interest-rate gap between the two economies.
• Immediate chart resistance sits around 157.08–157.10, with initial support near 157.00.

Market Move

USDJPY recovered above 157.00 in its most recent trading session. The pair rebounded around 156.86–156.88, followed by a gradual rise and a stronger push through 157.00. Price reached 157.09 before easing to 157.061, close to its rising nine-period moving average. USDJPY traded at a high of 157.218 and low of 156.650.

The rebound came despite pressure on the broader dollar. The dollar index eased to 101.64, while US 10-year and 30-year Treasury yields stood at 4.974% and 5.299%, respectively.

Why Traders Are Watching

Falling Treasury yields can reduce the appeal of dollar assets relative to Japanese assets. If US yields continue declining without a similar fall in Japanese yields, USDJPY could face renewed selling pressure. However, the latest session shows buyers returning above 157.00, suggesting the broader dollar weakness has yet to produce a sustained decline in the pair.

Oil also adds another layer of uncertainty. Brent crude fell more than 1% towards $115 a barrel after reports of Qatari mediation efforts in Tehran. Lower oil prices could ease Japan’s energy import costs and support the yen. They could also reduce US inflation concerns, potentially weighing on Treasury yields. However, improved risk appetite may reduce defensive demand for the yen, making the overall currency reaction less straightforward.

Key Trading Levels

The nearest resistance zone combines the latest visible peak with 157.10, making it a useful reference for assessing the strength of the recovery. The displayed high of 157.218 marks a separate, broader boundary above that area.

Below the market, 157.00 separates the latest advance from the earlier consolidation. The 156.94–156.96 zone reflects previous price congestion, while 156.86–156.88 identifies where the visible rebound began. The low of 156.650 provides a wider downside reference.

Bullish and Bearish Setups

The bullish case requires buyers to extend the recovery beyond the latest peak. Holding the breakout area on a retest would provide stronger confirmation than a brief move above resistance.

The bearish case strengthens if price loses 157.00 and sellers prevent a recovery above it. That would suggest the latest advance is fading, with lower support zones returning to focus.

Disclaimer

The price levels and market scenarios above reflect the author’s assessment at the time of writing. They do not represent financial advice or an official recommendation from VT Markets. Traders should conduct their own analysis and manage risk carefully.

USDJPY Prediction: What’s Next?

USDJPY could rise if Treasury yields recover, the Fed signals that restrictive policy will remain in place, or the BOJ gives limited guidance on further tightening. These developments could preserve the dollar’s interest-rate advantage.

USDJPY could fall if US yields decline further, the Fed signals greater willingness to ease policy, or the BOJ points towards additional rate increases. Lower oil prices could also help the yen by easing Japan’s energy import burden.

Geopolitical headlines bring additional volatility. Their impact will depend on how they affect oil, bond yields and demand for both currencies. Upcoming events include the Federal Reserve meeting on October 27–28, followed by the Bank of Japan on October 29–30. Their guidance could change expectations for the future interest-rate gap between the US and Japan. Markets are expecting both central banks to hold rates steady. However, even without a rate change, comments about inflation or future policies could move the pair.

Trade USDJPY with VT Markets

USD/JPY is one of the most actively traded forex pairs, offering exposure to movements between the US dollar and Japanese yen.

Through VT Markets, traders can access major currency pairs with competitive trading conditions, flexible leverage options and advanced platforms including MT4, MT5, WebTrader and the VT Markets App.

With charting tools and more, traders can analyse opportunities and manage positions across different market conditions.

Start trading forex CFDs with VT Markets.

Start trading now — click here to create your real VT Markets account.