USDJPY strengthens for the sixth session in a row

The USDJPY rate continues to rise confidently against the backdrop of stronger expectations that the US Fed will maintain a hawkish monetary policy. The current quote is 158.87. More details are in our analysis for 18 May 2026.

USDJPY forecast: key takeaways

• Negotiations between the US and Iran remain without progress, increasing market uncertainty
• The Japanese yen remains under pressure against the backdrop of the divergence in US and Japanese monetary policy
• Inflationary pressure in the US is rising because of higher energy prices after the escalation of the conflict in the Middle East
• USDJPY forecast for 18 May 2026: 159.85

Fundamental analysis

The USDJPY currency pair is rising for the sixth trading session in a row. Buyers have confidently consolidated above resistance at 158.45. The Japanese yen remains under pressure against the backdrop of growing expectations that the Fed may raise interest rates again this year to contain inflation. Rising inflationary pressure in the US is linked to higher energy prices after the escalation of the conflict in the Middle East. Additional uncertainty is coming from the lack of progress in negotiations between the US and Iran.

The weakening yen is increasing pressure on the BoJ, because the regulator may be forced to accelerate monetary policy tightening to contain domestic inflation. This week, investors will focus on the release of Japan’s GDP, trade balance, and inflation data, which may provide new signals about the state of the country’s economy.

Additional support for hawkish expectations came from comments by a member of the Bank of Japan’s Board of Governors, who called for faster interest rate increases and pointed to stronger inflation risks against the backdrop of geopolitical tension. These factors may limit the further upside potential in USDJPY.

Technical outlook

USDJPY quotes continue to move within a steady upward channel. Buyers are holding the price above the EMA-65 line, which points to the preservation of control by the bulls. Today’s USDJPY forecast expects a rebound from the lower boundary of the channel, followed by growth in quotes towards the 159.85 level.

The technical picture remains favourable for further strengthening in the pair. The Stochastic Oscillator is turning down from the overbought area and is approaching the support line, which may signal the formation of a new growth wave after a short-term correction. An additional confirmation of the bullish scenario will come from a breakout of resistance with consolidation of the price above the 159.25 level.

The alternative scenario assumes a stronger bearish correction if the lower boundary of the upward channel is broken and quotes consolidate below the 158.35 mark. In that case, the probability of a deeper decline in the USDJPY pair will increase.

USDJPY overview

• Asset: USDJPY
• Timeframe: M15 (Intraday)
• Trend: upward
• Key resistance levels: 159.15 and 159.55
• Key support levels: 158.65 and 158.20

USDJPY trading scenarios for today

Main scenario (Buy Stop)

A breakout of resistance at 159.05 and consolidation above this level will indicate stronger development of the bullish impulse and create conditions for opening long positions.

• Take Profit: 159.85
• Stop Loss: 158.45

Alternative scenario (Sell Stop)

A breakout of the lower boundary of the bullish channel with consolidation of quotes below the 158.20 level will indicate the development of a deeper bearish correction in the pair.

• Take Profit: 156.70
• Stop Loss: 157.80

Risk factors

The key risk factors for further USDJPY growth are a possible strengthening of hawkish signals from the BoJ, which may accelerate yen strengthening and change the balance of monetary expectations. Additional pressure may come from the development of a bearish correction if the lower boundary of the upward channel is broken and global risk appetite worsens against the backdrop of geopolitical uncertainty.

Summary

The USDJPY currency pair is preserving upward impulse against the backdrop of fundamental support for the US dollar, although growing expectations of tighter BoJ policy may limit the pair’s further upside potential. USDJPY technical analysis points to the preservation of upward impulse with a high probability of continued growth in quotes towards the 159.85 level.

Open Account

Editors’ picks

EURUSD 2026-2027 forecast: key market trends and future predictions

This article provides the EURUSD forecast for 2026 and 2027 and highlights the main factors determining the direction of the pair’s movements. We will apply technical analysis, take into account the opinions of leading experts, large banks, and financial institutions, and study AI-based forecasts. This comprehensive insight into EURUSD predictions should help investors and traders make informed decisions.

Gold (XAUUSD) forecast 2026 and beyond: expert insights, price predictions, and analysis

Dive deep into the Gold (XAUUSD) price outlook for 2026 and beyond, combining technical analysis, expert forecasts, and key macroeconomic factors. It explains the drivers behind gold’s recent surge, explores potential scenarios including a move toward 4,500 to 5,000 USD per ounce, and highlights why the metal remains a strong hedge during global uncertainty.