Final countdown for USDJPY: ultimatum, rumours of peace, and the threat of intervention

The USDJPY pair is balancing on the edge of a breakout above the 160.00 level and intervention by the Japanese government. Quotes are testing the 159.80 mark. Discover more in our analysis for 7 April 2026.

USDJPY forecast: key takeaways

• Household spending in Japan fell by 1.8%
• Japan is on the verge of intervention
• The International Monetary Fund is pressuring the Bank of Japan to raise rates
• USDJPY forecast for 7 April 2026: 158.90 or 161.00

Fundamental analysis

Fundamental analysis for 7 April 2026 takes into account that the USDJPY pair has staged a real thriller, balancing on the edge of a psychological abyss. The Asian session opened the week with a sharp upward surge, almost testing the 160.00 level, but, as on previous occasions, bulls lacked the strength to decisively attack this mark, and quotes are now hovering around 159.80.

The main driver of today’s swings is the verbal duel between Washington and Tehran, which is keeping the market on edge:

• US President Donald Trump issued a harsh ultimatum to Iran to reopen the Strait of Hormuz by this evening.

Otherwise, he promised hell for Iranian infrastructure, calling the coming day the Day of Power Plants and the Day of Bridges

• At first glance, news of inevitable escalation should have sent the market tumbling. However, the dollar-yen rate moved higher, driven by media reports that the US and Iran, with Pakistan acting as mediator, are discussing a 45-day truce. The market is now reeling from contradictory signals: at times the continuation of the war seems inevitable, at others there is hope for peace

While the dollar is basking in the rays of geopolitical chaos, the yen is sinking into the abyss of its own economic problems. Statistics gave bears more strength:

• Household spending in Japan fell by 1.8% year-on-year. The decline has now repeated for the third consecutive month, suggesting that Japanese consumers are tightening their belts and do not believe in a brighter future
• Japan imports almost 100% of its oil. A rise in oil prices above 100.00 USD is a direct blow to the country’s trade balance and economy
• The International Monetary Fund is pressuring the Bank of Japan to raise rates. But in its own report, the BoJ fears that the war will kill economic growth and is adopting a wait-and-see approach. The market is currently pricing in a 70% probability of a rate hike at the April meeting, but weak consumption data is casting doubt on this
• If the pair breaks sharply above 160.00, the Japanese authorities may enter the market to sell the dollar by conducting an intervention. This may trigger a sharp market reaction and an immediate fall of 200-300 points in the USDJPY rate

This evening will become decisive for the USDJPY pair. On the one hand, the abyss of war and Japan’s weak economy are pushing the rate higher. On the other hand, there is a guillotine blade of intervention by the Japanese authorities. Trading near 160.00 is playing with fire, where statements from the White House and closed-door diplomatic talks matter more than charts.

Technical outlook

On the H4 chart, the USDJPY pair has formed a Hammer reversal pattern near the lower Bollinger Band and is hovering around 159.70. Since the price remains within an ascending channel, it may break resistance and continue its upward trajectory following the pattern’s signal, with the upside target at 161.00.

At the same time, the USDJPY forecast also considers another market scenario, where the USDJPY rate may form a corrective wave and test the 158.90 support level before growth.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (Intraday)
• Trend: sideways
• Key resistance levels: 160.00 and 161.00
• Key support levels: 158.90 and 157.75

USDJPY trading scenarios for today

Main scenario (Sell Stop)

Consolidation below the 158.90 level would indicate an exit from the sideways trend and increased selling pressure amid profit-taking following the rally.

• Take Profit: 157.75
• Stop Loss: 159.20

Alternative scenario (Buy Stop)

A breakout above the 160.00 level would confirm continued upward momentum and an attempt to reach new local highs.

• Take Profit: 161.00
• Stop Loss: 159.60

Risk factors

The risks to the decline include heightened geopolitical tensions following Trump’s statements, which may support the dollar. In addition, the yen remains under pressure amid rising energy prices. At the same time, expectations of Bank of Japan policy tightening and possible currency interventions could limit the pair’s gains.

Summary

The USDJPY pair is on the verge of a breakout above 160.00 and intervention by the Japanese government. USDJPY technical analysis suggests growth towards the 161.00 level.

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