USDJPY remains at risk of a further decline

The USDJPY pair is correcting after a sharp decline amid falling oil prices and expectations of a change in BoJ policy. The rate currently stands at 156.37. Discover more in our analysis for 7 May 2026.

USDJPY forecast: key takeaways

• The Japanese yen is strengthening amid a sharp decline in oil prices
• Lower oil prices are reducing inflationary pressure on the Japanese economy
• Minutes of the BoJ’s March meeting pointed to the possibility of further interest rate hikes
• USDJPY forecast for 7 May 2026: 154.45

Fundamental analysis

The USDJPY rate is undergoing a correction after falling sharply and rebounding from the 157.65 resistance level. Despite persistent selling pressure, buyers are holding support at 155.55, preventing a deeper decline and a full-fledged bearish momentum.

The Japanese yen received additional support amid a sharp drop in oil prices, with Brent quotes reaching 99.93 USD. Pressure on the commodity market increased following signs of a possible agreement between the US and Iran to end the military conflict and reopen the Strait of Hormuz. For Japan’s economy, which remains one of the largest importers of oil from Middle Eastern countries, lower energy prices reduce external inflationary pressures and improve the trade balance outlook.

The easing of risks linked to rising oil prices also gives the BoJ more room for further monetary policy normalisation. Meanwhile, the published minutes of the regulator’s March meeting showed that Bank of Japan officials are open to the possibility of further interest rate hikes if the energy shock linked to the situation around Iran persists.

Technical outlook

The USDJPY pair continues its corrective movement within the Triangle pattern. Sellers are confidently holding the price below the EMA-65, indicating stronger pressure from the bears and continued downside risks. Today’s USDJPY forecast suggests a rebound from the pattern’s upper boundary, followed by a downward momentum towards 154.45.

The technical picture remains bearish. The Stochastic Oscillator is approaching overbought territory and is forming conditions for a bearish crossover, signalling a high probability of further downward momentum. Consolidation below 155.75 will further confirm the downside scenario, indicating a breakout below the lower boundary of the Triangle pattern and strengthening the signal for a further decline in the pair.

An alternative scenario suggests renewed growth if the price breaks above the pattern’s upper boundary and consolidates above the 156.85 level. In this case, the probability of a deeper bullish correction will increase.

USDJPY overview

• Asset: USDJPY
• Timeframe: M15 (Intraday)
• Trend: downward momentum
• Key resistance levels: 156.50 and 157.75
• Key support levels: 155.80 and 155.05

USDJPY trading scenarios for today

Main scenario (Sell Stop)

A breakout of the Triangle’s lower boundary and consolidation below the 155.90 level would create conditions for opening short positions.

• Take Profit: 155.50
• Stop Loss: 156.65

Alternative scenario (Buy Stop)

A breakout above the upper boundary of the Triangle pattern and consolidation above 156.45 would indicate a bullish correction.

• Take Profit: 157.55
• Stop Loss: 156.05

Risk factors

Risks to the USDJPY downside scenario will increase if oil prices recover and demand for the Japanese yen as a safe-haven asset weakens. A breakout of the 156.85 level and consolidation above the upper boundary of the Triangle pattern would be an additional signal to reverse the bearish scenario.

Summary

USDJPY technical analysis suggests a continued downside scenario, with a high probability of a breakout below the lower boundary of the Triangle pattern and the start of a move towards the pattern’s target at 154.45.

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