USDJPY continues to develop the third wave towards 158.40

The USDJPY pair continues to develop its third upward wave following Japan’s recent elections. Discover more in our analysis for 23 October 2025.

USDJPY forecast: key trading points

• Market focus: interest rate differential and US bond yield dynamics
• Current trend: bullish
• USDJPY forecast for 23 October 2025: 153.30 or 154.30

Fundamental analysis

The USDJPY pair maintains its strong bullish momentum amid the widening interest rate differential between the US and Japan. Yields on US 10-year Treasury bonds are once again rising, strengthening the dollar’s position. Comments from Federal Reserve officials about keeping rates higher for longer continue to reinforce expectations of prolonged monetary tightening.

Meanwhile, the Bank of Japan remains committed to its ultra-loose monetary stance. However, speculation is growing that policymakers may eventually move towards normalisation if inflationary pressures persist. Verbal interventions by the Japanese authorities help limit excessive yen weakness, but so far have had no significant impact on the pair’s upward trajectory.

USDJPY technical analysis

On the H4 chart, the USDJPY pair formed a consolidation range around 151.80, above the Alligator indicator, and has since broken higher. The pair continues to realise its upside potential towards 153.30.

If this level is breached, the uptrend could extend further to 154.30, where a local target lies. A subsequent corrective phase is expected, with a potential pullback towards 150.30 before the pair resumes its upward trajectory, with targets at 155.70 and 158.40 – the zone of estimated medium-term upside targets.

Summary

The USDJPY rate continues to hold above the key support level at 151.00, maintaining a solid bullish structure. The primary scenario remains an upward move towards 153.30–154.30, followed by a corrective pullback and renewed growth. A breakout above 155.70 would open the path to the long-term target near 158.40.

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