USDJPY hits new lows: the yen returns to last year’s levels

The yen continues to strengthen, with the USDJPY pair falling to a seven-month low. The USDJPY rate currently stands at 153.47. For more details, see our analysis for 9 September 2026.

USDJPY forecast: key takeaways

• Japan’s GDP data did not affect the USDJPY rate
• The likelihood of a Federal Reserve rate hike in September has risen to around 62%
• The market is awaiting the release of US inflation data on Friday
• USDJPY forecast for 9 September 2026: 156.25

Fundamental analysis

Fundamental analysis for 9 September 2026 shows that Japan’s GDP data strengthens the fundamental case for further yen appreciation and puts pressure on the USDJPY pair. According to the released data, Japan’s economy grew by 0.4% quarter-on-quarter in Q2, compared to a forecast of 0.3%, although the pace of growth slowed slightly from the previous 0.5%. The stronger result shows that the Japanese economy remains resilient even after interest rate hikes have already begun. This is particularly important ahead of the upcoming Bank of Japan meeting: the market is almost fully pricing in the likelihood of another 25-basis-point rate hike. A 2.4% year-on-year increase in real wages in Japan in July further bolsters the regulator’s stance.

This factor is negative for the USDJPY rate. Rising rates in Japan are gradually narrowing the significant yield gap between US and Japanese assets, which in previous years was one of the main drivers of the yen’s weakness. In addition, expectations of a Bank of Japan rate hike are encouraging some Japanese capital to return to the domestic market and prompting the unwinding of positions based on cheap yen funding. These processes have been among the reasons for the sharp strengthening of the Japanese currency in recent days.

The analysis for 9 September 2026 takes into account that the fundamental picture is not entirely one-sided. The US dollar is supported by a strong US labour market and high Treasury yields. Following a much stronger-than-expected Nonfarm Payrolls report, the probability of a Federal Reserve rate hike in September increased, while the yield on 10-year US Treasuries approached 4.8%. High yields on US assets continue to support the dollar’s appeal.

Technical outlook

On the D1 chart, the USDJPY pair has decisively broken below the 155.15 support level, while a new support level has not yet formed. The resistance level has shifted to 156.75. On the H4 chart, support has formed at 152.85, and resistance has shifted to 154.75. Conditions are now in place for an upward correction within the broader trend, with the first target for the correction at 156.25.

At the same time, the USDJPY forecast also considers an alternative scenario in which the rate could continue to decline and break below the 152.85 level, targeting 151.55.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (intraday)
• Trend: bearish
• Key resistance levels: 154.75 and 156.75
• Key support levels: 152.85 and 155.15

USDJPY trading scenario for today

Main scenario (Buy Stop)

Consolidation above the 154.75 resistance level would confirm the start of a correction and create conditions for further USDJPY growth.

• Current price: 153.47
• Entry level: 154.85
• Take profit: 156.25
• Stop loss: 154.45
• Risk-to-reward ratio: more than 1:3.5

The trade idea is valid until 8:00 AM on 10 September 2026 (server time, UTC+3).

Risk factors

The main risk factors for the USDJPY downside scenario are primarily linked to monetary policy trajectories in the US and Japan. If US inflation comes in above expectations or the Federal Reserve gives a more hawkish signal regarding further rate hikes, US Treasury yields could rise significantly again, strengthening demand for the dollar and triggering a USDJPY recovery. Another risk is potential market disappointment with the Bank of Japan’s actions: if the regulator raises rates but at the same time signals a cautious approach to further policy tightening, some of the yen’s recent gains could be quickly reversed.

Summary

Stronger Japanese GDP data reinforces the Bank of Japan’s case for further rate hikes and supports the yen. A technical breakout below 155.00 also indicates a shift in the short-term market structure in favour of sellers. At the same time, after such a rapid decline, the likelihood of a local upward correction has increased markedly. Some short-term indicators have already entered oversold territory, so an attempt by the USDJPY pair to recover would not automatically signal a reversal of the current trend. USDJPY technical analysis suggests a correction towards 156.25.

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