Japan versus the US: what is behind the correction in USDJPY?

Weak economic indicators from Japan and early elections to the lower house of parliament may push the USDJPY pair higher towards the 158.70 area. Find out more in our analysis for 6 February 2026.

USDJPY forecast: key takeaways

• Japan’s household spending: previously at 6.2%, currently at −2.9%
• Early elections to Japan’s lower house of parliament
• USDJPY forecast for 6 February 2026: 157.70 and 159.30

Fundamental analysis

The outlook for 6 February 2026 appears favourable for the USD. The USDJPY pair is forming a corrective wave and may continue its upward trajectory, with quotes currently trading near the 156.70 level.

Japan’s household spending reflects the volume of household expenditure adjusted for inflation over the reporting period compared to the same month of the previous year. The calculation includes spending on healthcare, utilities, food, housing, consumer goods, and other categories.

The actual reading came in at −2.9%, dropping sharply from the previous value of 6.2%. At the same time, the forecast had already been in negative territory at −1.3%. As a result, the actual data failed to provide support for the yen.

The USDJPY outlook for today takes into account that almost all Japanese statistical releases came in weaker than previous readings. This had no immediate significant impact on the yen, but over time, it may contribute to its weakening against the USD.

In addition to economic data, early elections to the lower house of parliament will take place in Japan on 8 February. If the party led by Sanae Takaichi wins, it will be able to implement its plans to stimulate the economy. Measures aimed at economic stimulus could increase Japan’s public debt and trigger renewed pressure on the yen.

Technical outlook

On the H4 chart, the USDJPY pair formed an Engulfing reversal pattern near the lower Bollinger Band and is trading around 156.70. At this stage, the pair may continue its upward movement as the pattern signal plays out, with the upside target at 158.70.

At the same time, the USDJPY forecast also considers an alternative scenario involving a correction towards 156.00 before renewed growth.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (Intraday)
• Trend: bullish
• Key resistance levels: 157.70 and 159.30
• Key support levels: 155.40 and 152.15

USDJPY trading scenarios for today

Main scenario (Buy Stop)

A consolidation above 157.70 will confirm a breakout above the key resistance zone and indicate a continued recovery move after the January decline. In this case, focus shifts towards the upper target near 159.30.

The risk-to-reward ratio is around 1:4. The upside potential is approximately 160 pips, with risk limited to about 40 pips.

• Take Profit: 159.30
• Stop Loss: 157.30

Alternative scenario (Sell Stop)

A breakout and consolidation below the 155.40 support level will signal weakening bullish momentum and the risk of a deeper correction after a failed growth attempt.

• Take Profit: 152.15
• Stop Loss: 156.00

Risk factors

Risks to further USDJPY gains include the upcoming elections in Japan and potential comments from authorities regarding the yen, which could increase volatility and demand for safe-haven assets. Additional pressure on the pair may come from expectations surrounding Japan’s Q4 GDP release if the data points to a stronger economic recovery. Technically, the 156.8–157.1 area remains a sensitive resistance zone, where corrective profit-taking is possible.

Summary

Ahead of early elections to Japan’s lower house of parliament, the yen continues attempts to stabilise. Technical analysis of USDJPY suggests a move towards the 157.70 area after a minor correction.

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