Lower wages in Japan increase risks for further USDJPY growth

The USDJPY rate is undergoing a correction. However, buyers remain firm at the key resistance level of 158.55. Find out more in our analysis for 9 January 2025.

USDJPY forecast: key trading points

• The Japanese yen remains under pressure due to the Federal Reserve’s hawkish signals and concerns about Donald Trump’s tariff threats
• The 0.3% decline in Japan’s real wages in November fuelled concerns about a BoJ interest rate hike
• Minister of Finance Katsunobu Kato warned against speculative movements in the currency market, showing the regulator’s readiness to intervene if necessary
• USDJPY forecast for 9 January 2025: 159.25 and 160.25

Fundamental analysis

The USDJPY rate is undergoing a correction within an ascending channel. Buyers managed to keep the pair above the 157.95 support level. The Japanese yen continues to face pressure amid the Fed’s hawkish signals and renewed concerns about Donald Trump’s tariff threats.

The 0.3% year-on-year decline in Japan’s real wages in November marked the fourth consecutive month of negative dynamics, adding to concerns about the BoJ interest rate hike prospects. Additionally, Wednesday’s data showed consumer sentiment weakened in December, further strengthening such expectations.

Meanwhile, Minister of Finance Katsunobu Kato reiterated that speculative movements in the currency market are unacceptable, noting the government’s readiness to intervene in case of excessive volatility. As part of today’s USDJPY forecast, such statements may limit buying activity and prevent a breakout above the 158.65 resistance level.

USDJPY technical analysis

USDJPY quotes are holding above the EMA-120 line, supporting the uptrend. According to today’s USDJPY forecast, the price is expected to test the 157.75 support level before rising to the upper boundary of an ascending channel at 159.25. If it successfully secures above the upper boundary of the bullish channel, this would signal further growth to 160.25. The growth scenario will be invalidated if the price plunges below 157.75, potentially triggering a deeper correction towards 156.05.

Summary

The USDJPY rate maintains its upward momentum, holding above 157.75. However, further growth may be limited due to Japan’s Minister of Finance statements about readiness for currency interventions. The Federal Reserve policy and domestic economic risks continue to weigh on the Japanese yen. The USDJPY technical analysis shows a persisting uptrend with a potential rise to the 159.25 and 160.25 levels. At the same time, securing below the 157.75 level could change the scenario, leading to a deeper correction towards 156.05.