The Fed vs the BoJ: who will win the battle for the USDJPY rate

The yen is once again attempting to recover after losing ground against the USD, with the USDJPY rate currently at 161.70. Discover more in our analysis for 10 July 2026.

USDJPY forecast: key takeaways

• The Japanese government intends to stimulate the largest pension funds
• Support for the yen is rather temporary
• Further currency intervention remains likely
• USDJPY forecast for 10 July 2026: 161.30 and 162.70

Fundamental analysis

The USDJPY forecast for 10 July 2026 takes into account that the pair pulled back from the recent highs around 162.00 following reports that the Japanese government intends to stimulate the largest pension funds, including GPIF, and increase investment in domestic assets. The market interpreted this as a long-term measure to support the Japanese currency rather than as an attempt to carry out another currency intervention.

Despite the current correction, the rate is still hovering near levels that previously prompted intervention by the Japanese authorities. The market also continues to price in the likelihood of further Fed policy tightening, while high US bond yields still make the dollar more attractive than the yen. It is the yield differential that remains the main driver of long-term USDJPY growth.

Today’s USDJPY forecast takes into account that the price is forming a corrective wave, but it is still premature to talk about a trend reversal. Support for the yen is rather temporary thanks to initiatives by the Japanese authorities. At the same time, fundamental factors – the high interest rate differential and expectations of Federal Reserve monetary policy tightening – are still supporting the USD. The main risk for market participants remains the probability of further currency intervention if the pair approaches the 162.00 level again.

Technical outlook

On the H4 chart, the USDJPY pair has formed a Shooting Star reversal pattern near the upper Bollinger Band and is trading around 161.65. Since the price remains within an ascending channel, it may continue its corrective wave following the pattern signal, with the downside target at 161.30.

At the same time, the USDJPY forecast also takes into account another market scenario, under which the USDJPY rate may continue to rise towards 162.70 without testing the support level.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (Intraday)
• Trend: upward
• Key resistance levels: 161.80 and 162.70
• Key support levels: 161.30 and 160.55

USDJPY trading scenarios for today

Main scenario (Buy Stop)

A breakout above the 161.80 resistance level would create conditions for opening long positions and indicate continued upward momentum.

• Take Profit: 162.70
• Stop Loss: 161.60

Alternative scenario (Sell Stop)

A breakout below the lower boundary of the ascending channel, with the price consolidating below 161.30, would signal increased bearish pressure and a decline.

• Take Profit: 160.55
• Stop Loss: 161.50

Risk factors

The risk to the USDJPY upside scenario remains if demand for the Japanese yen as a safe-haven asset strengthens amid easing geopolitical tensions. More hawkish BoJ rhetoric, currency intervention, and expectations of further interest rate hikes may become additional pressure factors for the pair, limiting the upward move.

Summary

The yen continues its struggle against the USD and is once again attempting to strengthen without waiting for intervention from the Japanese government. USDJPY technical analysis suggests a decline towards the 161.30 support level.

Open Account

Editors’ picks

EURUSD forecast 2026–2027: technical analysis, price levels & predictions

The ECB holds rates at 2.15% while the Fed stays at 3.75% — and that divergence is the central driver of EURUSD in 2026. The pair is range-bound between 1.1400 and 1.1915, with Deutsche Bank targeting 1.2500 and Morgan Stanley calling for 1.3000 by year-end. We analyse the technicals, break down the macro factors, and outline three trading scenarios with specific entry levels.

Gold (XAUUSD) forecast 2026: predictions based on fundamental and technical analysis

Gold has corrected over 25% from its all-time high of 5,597 USD and is now trading near 4,100 USD — testing a critical support zone. Is this the bottom, or will the downtrend continue? We break down the key levels (support 3,920 USD, breakout trigger 4,500 USD), three trading scenarios with entry levels, and what J.P. Morgan, Goldman Sachs and Deutsche Bank are forecasting for gold in 2026.