USDJPY is on the rise again, and there is more to come

The USDJPY pair rose to 158.36 on Friday. Uncertainty persists regarding the Bank of Japan’s stance on interest rates. Find out more in our analysis for 10 January 2025.

USDJPY forecast: key trading points

• The USDJPY pair reaches new multi-year highs
• The yen will remain under pressure until the Bank of Japan clarifies its interest rate policy
• USDJPY forecast for 10 January 2025: 158.45 and 159.00

Fundamental analysis

The USDJPY rate ended the week even higher, hovering around 158.36.

The Japanese yen has now fallen to a new multi-year low. Uncertainty about the timing of an interest hike by the Bank of Japan exerts significant pressure on the JPY. As Japan’s Economy Minister Ryosei Akazawa said yesterday, the country’s economy is at a critical stage where overcoming the public’s deflationary mindset is essential. However, he did not specify when the BoJ might be ready to raise borrowing costs.

Japan’s household spending fell by 0.4% year-on-year in November, while earnings rose by 0.7%.

Externally, the yen faces additional pressure from a strong US dollar. The USDJPY forecast appears positive.

USDJPY technical analysis

The USDJPY pair, having broken above the 157.90-158.00 resistance area, has the potential to rise to 158.45 on the H4 chart, with a longer-term target at 159.00.

Some options expire today. The largest volumes are concentrated around 157.00-157.10 (856 million USD) and 157.90-158.00 (771 million USD). The market may move sharply upwards after these contracts are closed.

Summary

The USDJPY pair continues its ascent amid the yen’s vulnerability and pressure from the US dollar. Today’s USDJPY forecast suggests a rise to 158.45, followed by a rally to 159.00.