The US Dollar faced resistance at 152.35 against the Japanese Yen after recovering from 151.10. On Monday, the Dollar rose against the Yen but struggled to surpass the support area of 152.35 during European trading.

Japan’s political uncertainty has weakened the Yen, as the Komeito party left the coalition with the LDP due to leader Sanae Takaichi’s divergences. The 4-hour chart shows weakening bullish momentum, though the RSI remains above 50. Failure to rise above 152.35 could lead to a retest of lows around 151.70.

Market Targets and Forecasts

Should the US Dollar drop, bears could target the previous Friday’s low of 151.10 or October 7’s low near 150.30. Conversely, surpassing the 152.35 level would open the path to the October 9 highs above 153.20. Further gains might target the 127.2 Fibonacci retracement level at 183.85.

The Japanese Yen showed varied performance against other major currencies. It was strongest against the New Zealand Dollar, while changes included USD up by 0.22%, GBP higher by 0.14%, and CAD down by 0.18%. The data reflects the Yen’s relative position amidst current currency movements.

As of October 13, 2025, we are closely watching the USD/JPY pair as it tests the critical 152.35 resistance level. A failure to push past this point suggests that the recent upward momentum is fading. Recent data from the U.S. Commodity Futures Trading Commission shows that while large speculators slightly reduced their massive short positions on the yen, the overall bearish sentiment remains dominant.

Impact of Central Bank Policies

The yen’s weakness is fundamentally driven by political turmoil in Japan, specifically the Komeito party’s decision to leave the ruling LDP coalition. This instability makes it highly unlikely that the Bank of Japan will move away from its ultra-loose monetary policy anytime soon. This policy paralysis stands in stark contrast to other central banks, keeping sustained pressure on the yen.

If the 152.35 level holds as resistance, traders should prepare for a potential slide back towards the 151.10 support area in the near term. A break below that could trigger a deeper correction toward 150.30, presenting an opportunity for those positioned with put options. The slowing momentum seen on shorter-term charts supports this possibility of a downward reversal.

Conversely, a confirmed break and hold above 152.35 would signal that the bullish trend is resuming, targeting the recent highs just above 153.20. Traders might consider buying call options to capitalize on such a breakout. This move would likely be fueled by the broad-based US dollar strength we’ve seen amid ongoing global trade tensions.

The market environment is complicated by safe-haven demand that has pushed gold to new records over $4,100. Unlike the constant verbal warnings from Japan’s Ministry of Finance that we saw back in 2024, officials have been quiet, likely distracted by the domestic political crisis. This lack of an immediate intervention threat may embolden dollar bulls to test higher levels.

Fueling the dollar’s strength, last week’s US core inflation figures came in slightly hotter than expected at 3.2% year-over-year, dampening any hope of a Federal Reserve rate cut before year-end. This growing policy divergence between a hawkish Fed and a troubled Bank of Japan continues to be the main driver of this currency pair. This fundamental imbalance suggests that any dips in USD/JPY will likely be seen as buying opportunities.

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