USDJPY rises amid weak Japanese economic data

The USDJPY rate is hovering near local highs amid worsening Japanese macroeconomic indicators and continued demand for the US dollar. The rate currently stands at 159.08. Discover more in our analysis for 26 May 2026.

USDJPY forecast: key takeaways

• Japan’s Leading Economic Index was revised down to 114.0 from the preliminary estimate of 114.5
• Japan’s unemployment rate rose to 2.7%
• Japan’s employment fell by 120 thousand, reaching the lowest level in 11 months
• USDJPY forecast for 26 May 2026: 159.65

Fundamental analysis

The USDJPY pair continues to strengthen after rebounding from the 158.75 support level. However, quotes have remained within a sideways range for seven consecutive trading sessions, with resistance at 159.20 and support near 158.75. Pressure on the Japanese yen intensified following the release of weak macroeconomic statistics from Japan.

Japan’s Leading Economic Index was revised down to 114.0 in March 2026 from the preliminary estimate of 114.5. Labour market data provided additional support for USDJPY growth. The unemployment rate rose to 2.7%, while the number of employed people fell by 120 thousand, reaching an 11-month low. Consumer confidence in Japan also deteriorated, reaching the lowest level since April 2025.

The latest economic reports signal only a moderate improvement in the Japanese economy. At the same time, risks associated with the escalation of the conflict in the Middle East and ongoing uncertainty around US trade policy continue to increase pressure on the Japanese currency.

Technical outlook

The USDJPY pair is on the rise after breaking above the upper boundary of the descending channel. Buyers managed to gain a foothold above the EMA-65, despite the short-term downward momentum. The bulls are now approaching the upper boundary of the Triangle pattern, a breakout above which could trigger a stronger upward impulse. The USDJPY forecast for today suggests a rise towards the 159.65 level.

The technical picture remains favourable for further steady gains in the USDJPY rate. The Stochastic Oscillator has consolidated above the downward trendline, signalling a likely strengthening of the bullish momentum in the near term. A breakout above the upper boundary of the Triangle pattern, with the price consolidating above 159.15, would further confirm growth.

An alternative scenario suggests stronger selling pressure if the reversal pattern's lower boundary is broken and prices settle below 158.80. This signal would confirm a breakout of the Triangle pattern’s lower boundary and a downward momentum with a target at 158.05.

USDJPY overview

• Asset: USDJPY
• Timeframe: M15 (Intraday)
• Trend: sideways with a Triangle pattern forming
• Key resistance levels: 159.15 and 159.55
• Key support levels: 158.75 and 158.25

USDJPY trading scenarios for today

Main scenario (Buy Stop)

A breakout above the upper boundary of the Triangle pattern, with consolidation above 159.15, would indicate that conditions are forming for opening long positions.

• Take Profit: 159.65
• Stop Loss: 159.05

Alternative scenario (Sell Stop)

A breakout below the pattern’s lower boundary and consolidation below 158.80 would increase selling pressure and could trigger a decline to 158.05.

• Take Profit: 158.05
• Stop Loss: 159.10

Risk factors

The main risks to the USDJPY upside scenario include the possibility of increased selling pressure if quotes fail to consolidate above the 159.15 resistance level and the upper boundary of the Triangle pattern. An additional negative factor could be a return below 158.80, which would break the short-term bullish structure and strengthen the downward momentum towards 158.05.

Summary

USDJPY technical analysis suggests that the upward momentum remains intact, with growth likely to continue towards 159.65 if the price breaks above the upper boundary of the Triangle pattern.

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