160.00 is getting closer: can Japan stop USDJPY from rising

The deterioration in Japan’s economic indicators is pushing the government towards radical measures. The current USDJPY quote is 159.45. More details are in our analysis for 1 June 2026.

USDJPY forecast: key takeaways

• Change in Japan’s capital expenditure: previous reading - 6.5%, actual - 0.0%
• The USDJPY rate is moving towards the psychological 160.00 mark
• The risk of a new intervention by the Japanese government is gradually rising
• USDJPY forecast for 1 June 2026: 160.50

Fundamental analysis

The fundamental analysis for 1 June 2026 shows that the pair continues to move within a horizontal channel while waiting for a trigger either for growth towards 160.00 or for a decline. On Tuesday morning, quotes are trading around 159.45.

Monday morning began with alarming news for the Japanese economy. The data showed that corporate capital expenditure in Q1 2026 unexpectedly stalled at zero, while the forecast was 4.0%. This sharp slowdown from 6.5% at the end of last year came as a cold shower for the market.

Capital expenditure is a driver of confidence in the future. A decline or halt in capital expenditure signals that business is freezing in anticipation of deterioration because of expensive energy and global tension, which directly undermines confidence in the yen.

The escalation of the conflict in the Middle East is working in favour of the US currency but against the yen, which has ceased to be a safe haven for investors. Under conditions of uncertainty, capital traditionally flows into the US dollar. High oil prices are accelerating inflation in the US. This is forcing the market to price in the preservation of high Fed interest rates and is making the USD even more attractive.

The USDJPY rate is moving towards the psychological 160.00 mark for several reasons. Two of them are the weakness of the Japanese economy, reflected in the collapse of capital expenditure data, and the strength of the dollar, driven by geopolitics and Fed rates. At the same time, with every point of growth, the risk of a new intervention by the Japanese government also rises.

Technical outlook

On the H4 chart, near the lower Bollinger Band, USDJPY formed a Hammer reversal pattern and is trading around 159.45. Since the price remains within the boundaries of an upward channel, it may form an upward wave as part of the pattern signal, with 160.50 still acting as the upside target.

At the same time, the USDJPY forecast also takes into account another market scenario, where the USDJPY rate may fall to support at 158.65 before growth.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (Intraday)
• Trend: upward
• Key resistance levels: 159.65 and 160.50
• Key support levels: 158.65 and 156.80

USDJPY trading scenarios for today

Main scenario (Sell Stop)

A breakout of support with quotes consolidating below 158.65 will indicate the formation of conditions for opening short positions.

• Take Profit: 156.80
• Stop Loss: 158.95

Alternative scenario (Buy Stop)

A breakout of resistance at 159.60 will increase pressure from the bulls and open the way for quote growth towards 160.50.

• Take Profit: 160.50
• Stop Loss: 159.35

Risk factors

The risks to the USDJPY downside scenario are linked to further strengthening in the US dollar and weaker Japanese economic indicators, which may lead to a retest of the psychological 160.00 mark.

Summary

The yen continues to lose ground after the publication of Japanese statistics. USDJPY technical analysis suggests growth in quotes towards 160.50.

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