USDJPY declines as unemployment and NFP data provides short-term support for the dollar

The yen’s appreciation has given way to a correction ahead of further US dollar weakness. The USDJPY rate currently stands at 155.66. Discover more in our analysis for 7 September 2026.

USDJPY forecast: key takeaways

• In recent weeks, expectations regarding the trajectory of interest rates, rather than their current level, have begun to support the yen
• The likelihood of a Federal Reserve interest rate hike in September rose to around 62%
• The market is awaiting the release of US inflation data today
• USDJPY forecast for 7 September 2026: 153.80

Fundamental analysis

Fundamental analysis for 7 September 2026 shows that the market situation for the USDJPY pair has shifted slightly in favour of the dollar. US Nonfarm Payrolls increased by 162 thousand in August, above the market expectations of around 56 thousand. The unemployment rate remained at 4.1%. Following the report, the likelihood of a Federal Reserve rate hike in September rose to around 57–62%.

Annual wage growth slowed to 3.1%, the lowest pace since 2021. The labour market therefore looks stronger than expected but does not show a clear new round of wage inflation. For this reason, the August CPI release on 11 September is likely to be decisive for the Federal Reserve meeting on 15–16 September.

The Bank of Japan has already officially stated that it intends to continue normalising monetary policy. In its July outlook, the BOJ said that if the baseline scenario materialises, it will continue to raise the interest rate. The Bank forecasts core inflation of around 2.5% in fiscal 2026, 2.4% in 2027, and approximately 2.0% in 2028.

The analysis for 7 September 2026 takes into account that the balance for the coming weeks looks mixed, but with a moderate bias towards a decline in the USDJPY rate. The dollar still has strong support from the Federal Reserve interest rate. The fundamental situation around the yen has changed much more significantly. The BoJ is likely to raise the rate to 1.25% as early as 18 September, with further tightening also possible.

Technical outlook

On the D1 chart, the USDJPY rate continued to decline after a prolonged correction and approached the 155.15 support level. The resistance level is located at 163.95. On the H4 chart, support is almost aligned with the D1 level, while resistance has shifted to 158.95. The first downside target is 153.80.

At the same time, the USDJPY forecast considers another possible scenario: the USDJPY rate could rebound from the support level and attempt to move above 158.95 before breaking above the resistance level.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (intraday)
• Trend: bearish
• Key resistance levels: 158.95 and 163.95
• Key support levels: 155.30 and 155.15

USDJPY trading scenario for today

Main scenario (Sell Stop)

Consolidation below the 157.10 support level would confirm continued downward movement and create conditions for a further decline in the USDJPY rate.

• Current price: 155.66
• Entry level: 155.05
• Take profit: 153.80
• Stop loss: 155.40
• Risk-to-reward ratio: more than 1:3.5

The trade idea is valid until 8:00 AM on 8 September 2026 (server time, UTC+3).

Risk factors

The main risk to this scenario is unexpectedly high US inflation on 11 September, followed by a hawkish Federal Reserve decision. If the BoJ simultaneously delivers the expected 25-basis-point rate hike but signals caution regarding its next steps, some of the yen’s already priced-in gains could be quickly reversed.

Summary

US labour market data slightly slowed the yen’s appreciation. However, if US inflation accelerates, expectations of a Federal Reserve interest rate hike could reverse the current trend. USDJPY technical analysis suggests a decline towards the 153.80 support level.

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