USDJPY trapped in a vice, the Japanese government is keeping a low profile

After testing the psychological 160.00 level, the USDJPY pair failed to consolidate above it and pulled back. The rate currently stands at 159.85. Discover more in our analysis for 4 June 2026.

USDJPY forecast: key takeaways

• The USDJPY pair tested the 160.00 level, and now the risk of intervention has risen significantly
• US initial jobless claims: previously at 215 thousand, projected at 214 thousand
• USDJPY forecast for 4 June 2026: 160.50

Fundamental analysis

Fundamental analysis for 4 June 2026 shows that, after testing the psychological 160.00 level, the pair rebounded and continued to move in a horizontal channel, awaiting a trigger to break above 160.00 or decline. On Thursday morning, quotes are trading around 159.85.

Thursday’s Asian session brought temporary relief for the Japanese currency. The dollar corrected after Israel and Lebanon agreed to extend the ceasefire. This diplomatic progress weakened demand for the USD as a safe haven slightly, allowing the pair to pull back towards 159.90.

On Wednesday evening, sellers proved stronger. Ignoring warnings from Japan’s Prime Minister and Finance Minister, the USDJPY rate tested the 160.08 level. Oil prices acted as an additional growth trigger, hitting Japan’s economy and weakening the yen.

BoJ Governor Kazuo Ueda indicated that he is ready to discuss a rate hike if inflation risks outweigh the risks to the economy. The market is already estimating the likelihood of a rate increase at the June meeting at 86%. The paradox is that if rumours of a rate hike are confirmed, this may trigger a downward reversal following the principle of buy the rumor, sell the fact.

The forecast for 4 June 2026 takes into account the ongoing confrontation between the USD and the yen. On the one hand, the market is squeezed by the threat of a repeat of the April scenario from the Japanese government, namely intervention. On the other hand, it is receiving support from high oil prices due to geopolitical conflicts and the strong US economy.

Technical outlook

On the H4 chart, the USDJPY pair formed a Harami reversal pattern near the lower Bollinger Band and is trading around 159.85. Since the price remains within an ascending channel, it could form an upward wave following the pattern signal, with the upside target remaining at 160.50.

At the same time, the USDJPY forecast also takes into account another market scenario, where the USDJPY rate could fall to the 159.15 support level before growth.

USDJPY overview

• Asset: USDJPY
• Timeframe: M15 (Intraday)
• Trend: upward
• Key resistance levels: 160.00 and 160.50
• Key support levels: 159.15 and 157.85

USDJPY trading scenarios for today

Main scenario (Buy Stop)

A breakout and consolidation above the 160.00 resistance level would indicate stronger USD and create conditions for opening long positions.

• Take Profit: 160.50
• Stop Loss: 159.85

Alternative scenario (Sell Stop)

A breakout and consolidation below the 159.15 support level would indicate the formation of a downward signal.

• Take Profit: 157.85
• Stop Loss: 159.35

Risk factors

Risks to the USDJPY upside scenario remain near 160.00, as further weakening of the yen may trigger direct currency intervention by the Japanese authorities. Easing geopolitical tensions and a weaker USD will act as an additional negative factor for buyers.

Summary

The USDJPY pair attempted to break above the psychological 160.00 level and consolidate above it, but buyers lacked the strength to do so. Technical analysis of USDJPY suggests growth towards 160.50 after the correction.

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