USDJPY tests 159.40 and retains upside potential towards 160.90

The USDJPY pair is recovering after the currency intervention and testing the 159.40 resistance level. A breakout above this level could open the way towards 160.90. The rate currently stands at 159.40. Discover more in our analysis for 12 August 2026.

USDJPY forecast: key takeaways

• The USDJPY pair is recovering after the currency intervention and testing the 159.40 resistance level
• The key macroeconomic event of the day will be the release of the US CPI
• USDJPY forecast for 12 August 2026: 160.90

Fundamental analysis

Fundamental analysis of USDJPY for 12 August 2026 shows that pressure on the yen persists. Over the past two days, the pair has risen towards 159.30–159.45 despite the recent joint currency intervention by the US and Japan. This shows that fundamental demand for the dollar currently remains stronger than the effect of the intervention.

At the same time, the domestic backdrop in Japan is gradually becoming more supportive for the yen. The summary of the Bank of Japan’s July meeting, published on 10 August, showed that several board members favour faster rate hikes due to inflation risks. However, even stronger expectations of tighter Bank of Japan policy have so far failed to reverse the USDJPY rate, suggesting that trades funded with cheap yen remain attractive.

In the US, the situation is less clear-cut. A weak July employment report reduced the likelihood of a Federal Reserve rate hike, although policymakers continue to point to excessively high inflation. Today’s key event will be the release of the July CPI: the headline index is expected to rise by 0.1% month-on-month and 3.4% year-on-year, with the core index up 0.2% month-on-month and 2.5% year-on-year. Higher inflation would strengthen expectations of a Federal Reserve rate hike in September and could return the USDJPY rate to 160.00, while weaker figures could trigger a significant strengthening of the yen.

The USDJPY forecast for 12 August remains moderately positive ahead of the CPI release. The interest rate differential and sustained demand for the dollar support the pair, but upside potential is limited by expectations of further Bank of Japan rate hikes and the high risk of another currency intervention. As the USDJPY pair approaches 160.00, the likelihood of intervention by the Japanese and US authorities becomes one of the main risks for buyers.

Technical outlook

USDJPY technical analysis shows that on the H4 chart, the pair is testing the 159.40 resistance level. The MACD indicator is in positive territory, indicating a continued uptrend and increasing the likelihood of a breakout above this level.

The next resistance level is located at 160.90. This mark could become the main upside target if the price consolidates above 159.40. Therefore, the forecast for 12 August 2026 suggests that the upward scenario remains in place, with a target around 160.90.

The USDJPY pair is gradually recovering after the currency intervention, while signals from the Bank of Japan about a possible further rate hike have so far been unable to stop the yen from weakening. Today’s USDJPY forecast remains positive as long as the pair holds above the nearest support level at 158.57.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (intraday)
• Trend: bullish
• Key resistance levels: 159.40 and 160.90
• Key support levels: 158.57 and 157.30

USDJPY trading scenarios for today

Main scenario (Buy Stop)

A breakout and consolidation above the 159.40 resistance level would confirm buyers’ strength and signal an opportunity to open long positions.

• Take Profit: 160.90
• Stop Loss: 158.54

Alternative scenario (Buy Limit)

A test of the 158.57 support level followed by a rebound would indicate that the bullish outlook remains intact and provide a more favourable entry point in terms of the risk-to-reward ratio.

• Take Profit: 160.90
• Stop Loss: 158.14

Risk factors

USDJPY maintains its upward bias despite the recent currency intervention and signals from the Bank of Japan about further rate hikes. A breakout above the 159.40 resistance level could open the way towards 160.90, although the risk of renewed intervention by the authorities remains high.

Summary

The key factor for the USDJPY pair today will be US inflation, as it could change expectations for the Federal Reserve’s September decision. A higher-than-expected CPI reading would strengthen the dollar, pushing the pair higher, while weaker inflation would increase the likelihood of a stronger yen.

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