USDJPY strengthens amid weakness of the Japanese yen

The USDJPY rate is strengthening amid expectations of changes in Japan’s monetary policy. The current quote stands at 155.93. Details — in our analysis for 18 December 2025.

USDJPY forecast: key takeaways

• On the daily chart, risks of forming a Double Bottom reversal pattern remain
• The Japanese yen is under pressure following statements by the Prime Minister regarding plans to support economic growth
• These measures have increased market concerns about a potential deterioration in Japan’s public finances
• USDJPY forecast for 18 December 2025: 157.25

Fundamental analysis

The USDJPY pair is strengthening for the second consecutive trading session after a confident rebound from the key support area around 154.65. On the daily chart, the risk of forming a Double Bottom reversal pattern remains, with its upper boundary located at the 156.90 level.

The Japanese yen continues to face pressure following statements by Prime Minister Sanae Takaichi, who confirmed plans to support economic growth and increase tax revenues. These measures have intensified market concerns regarding a further deterioration of Japan’s fiscal position.

Additional investor attention is focused on the two-day Bank of Japan meeting, after which a 25 basis point increase in the key interest rate is expected. The rationale for tightening policy remains persistent inflation, supported by high food prices and staying above the BoJ’s 2% target.

USDJPY technical analysis

USDJPY quotes have broken out of the descending channel and continue to move within the formation of a Double Bottom reversal pattern. The USDJPY forecast for today предполагает further growth of the currency pair toward the 157.25 level.

An additional signal in favor of the bullish scenario is formed by the Stochastic Oscillator: the signal lines have exited the oversold area and formed a bullish crossover, indicating strengthening buying activity.

A firm move above the 156.50 level will confirm the bullish scenario, reinforce expectations of completion of the Double Bottom pattern, and create conditions for further upside in the pair.

Summary

The USDJPY pair retains upside potential after rebounding from support at 154.65, while expectations of a BoJ rate hike and continued pressure on the yen increase the likelihood of a move toward the upper boundary of the Double Bottom pattern. Technical analysis of USDJPY confirms a bullish impulse, with a sustained move above 156.50 opening the way for further growth toward 157.25.

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