USDJPY is testing 160.00: can BoJ statements withstand the dollar’s rise

After the publication of the BoJ meeting minutes, the yen continues to lose ground, with quotes testing the 159.00 mark. More details are in our analysis for 25 March 2026.

USDJPY forecast: key takeaways

• The minutes of the Bank of Japan’s January meeting have been published
• The oil shock is choking Japan’s economy
• USDJPY forecast for 25 March 2026: 160.00

Fundamental analysis

The forecast for 25 March 2026 looks positive for the USD, as the USDJPY pair is forming an upward wave after a correction and may continue to rise. At the moment, quotes are trading around the 159.00 mark.

This morning, the minutes of the Bank of Japan’s January meeting were published, and they turned out to be far more hawkish than the market had expected. The document is literally filled with the regulator’s determination to tighten monetary policy.

Key quotes from the minutes:

• Do not delay: the Bank of Japan should not spend too much time analysing the consequences of previous rate hikes - it needs to move to the next step without missing the right moment
• Regularity: one board member stated directly that the rate should be raised at intervals of several months
• Fundamental reason: meeting participants agreed that, given low real interest rates, further policy tightening is justified if the economy and inflation develop in line with forecasts.

This signal is not just words. Inflationary pressure in Japan is increasing because of the rapid rise in energy prices (Brent tested 100 USD), which makes rate hikes a question not of if, but when. Markets are already pricing in a 60% probability of a rate hike at the next meeting in April.

At first glance, such hawkish statements should have sent USDJPY sharply downwards by strengthening the yen. However, this is not happening. The pair is holding above 158.50, and there are two solid reasons for this:

• The oil shock is choking the economy: the paradox of the situation is that the high inflation the BoJ is trying to contain is also weakening Japan’s economy. The country is the largest importer of energy resources, and the surge in oil prices above 100 USD per barrel is increasing the trade deficit and capital outflows. Traders fear that expensive energy may choke the fragile recovery, so they are in no rush to buy the yen
• The dollar is the king of safe havens: geopolitical tension in the Strait of Hormuz, where Iran and the US are exchanging threats, continues to push capital into the US dollar. As analysts note, the current conflict is an inflation shock, and in such conditions the dollar wins as the main reserve currency, outweighing even the BoJ’s hawkish signals.

The main intrigue is whether the yen will be able to realise the BoJ’s hawkish potential, or whether the factor of expensive oil and the safe-haven dollar will continue to push the pair upwards. The next few days will be decisive: either the BoJ will move from words to action, which will give the yen a chance, or the market will fully switch its focus to the energy crisis, and then a test of 160.00 and above will become only a matter of time.

Technical outlook

On the H4 chart, near the lower Bollinger Band, USDJPY formed a Hammer reversal pattern and is trading around the 159.00 mark. Since the price remains within an upward channel, it may continue the upward wave as part of this pattern’s signal, with the 160.00 mark acting as the upside target in this case.

At the same time, the USDJPY forecast also considers another market scenario, where USDJPY may form a corrective wave and test support at 158.20 before rising.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (Intraday)
• Trend: upward
• Key resistance levels: 159.10 and 160.00
• Key support levels: 158.20 and 157.00

USDJPY trading scenarios for today

Main scenario (Buy Stop)

Consolidation above the 159.10 level will confirm the resumption of the upward impulse within the current trend. The upside potential remains in place while the price holds in the upper part of the range.

• Take Profit: 160.00
• Stop Loss: 158.90

Alternative scenario (Sell Stop)

A break below support at 158.20 will indicate weaker buyers and the development of a corrective move within the upward channel.

• Take Profit: 157.00
• Stop Loss: 158.50

Risk factors

The risks to growth are linked to the inability to consolidate above 160.00, which may increase pressure from sellers. An additional factor would be a decline in oil prices or a weakening of the dollar, which would support the yen and activate a correction.

Summary

After the publication of the BoJ meeting minutes, the yen continues to lose ground against the USD. USDJPY technical analysis points to growth in quotes towards the 160.00 mark.

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