USDJPY continues to rise despite verbal interventions by the Bank of Japan

The USDJPY rate continues its correction after verbal interventions by the Bank of Japan, currently standing at 158.05. Discover more in our analysis for 19 January 2026.

USDJPY forecast: key takeaways

• The Bank of Japan will pay more attention to yen weakness than before
• The BoJ is likely to keep interest rates unchanged in January
• Japan’s Prime Minister informed the leadership of the ruling party of the intention to dissolve parliament
• USDJPY forecast for 19 January 2026: 161.20

Fundamental analysis

As the exchange rate approaches levels around 160 per dollar, Japanese authorities intensify signals of readiness to respond to sharp movements, including currency interventions, which increases the risk of short-term yen strengthening. Under such conditions, the market often becomes more cautious in holding long USDJPY positions, while volatility increases.

The probability of more hawkish rhetoric at the upcoming Bank of Japan meeting increases, and expectations of an earlier rate hike in the coming months strengthen if a weak yen begins to amplify inflationary pressure. This typically supports the yen and limits USDJPY growth, as investors begin to price in a narrower yield differential with the US.

According to current expectations, the regulator will keep monetary policy parameters unchanged next week, with markets pricing in the next interest rate hike approximately in March.

Technical outlook

USDJPY quotes continue their correction after reaching a new local high. However, a strong medium-term uptrend remains in place. There is ample room for correction before further gains.

The USDJPY forecast for today suggests a decline towards the 156.05 support level within the correction. After the strong appreciation of the US dollar, some speculators may take profits, which could become a reason for short-term yen strengthening.

Alternatively, USDJPY quotes may resume growth and break above the current resistance level with a target at 161.20. However, for now, this scenario carries the lowest probability amid ongoing verbal interventions by the Bank of Japan.

USDJPY overview

• Asset: USDJPY
• Timeframe: D1 (Medium-term trading)
• Trend: Bullish
• Key resistance level: 159.20
• Key support level: 156.05

USDJPY trading scenarios for today

Main scenario (Buy Limit)

A corrective decline towards the 156.05 level may form favourable conditions for implementing a long scenario within the context of the prevailing uptrend in USDJPY.

The risk-to-reward ratio exceeds 1:10. Potential profit upon reaching the target amounts to approximately 505 pips, while possible losses are limited to 50 pips, which makes the scenario attractive from a risk management perspective.

• Buy Limit: 156.05
• Take Profit: 161.20
• Stop Loss: 155.55

Alternative scenario (Sell Stop)

Short positions are possible if the price breaks and confidently consolidates below the 156.05 support level.

• Sell Stop: 155.95
• Take Profit: 154.35
• Stop Loss: 156.25

Risk factors

Risk factors for USDJPY growth remain the yield differential between US and Japanese government bonds. However, intervention by the Bank of Japan may lead to a significant strengthening of the JPY.

Summary

The USDJPY corrective decline is limited, while the continued uptrend supports a bullish outlook for the pair in the short term. USDJPY technical analysis indicates continued upside potential with a target at the 161.20 level.

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