USDJPY at a critical level: the dollar rises, but the BoJ may have a surprise for the yen

The yen continues to lose ground following the release of Japanese economic data, while the probability of intervention is gradually increasing. The current price is 158.20. Find out more in our analysis for 1 October 2026.

USDJPY forecast: key takeaways

• Several BoJ board members favour accelerating rate hikes
• The probability of intervention is gradually increasing
• USDJPY forecast for 1 October 2026: 158.85 and 157.85

Fundamental analysis

Fundamental analysis for 1 October 2026 shows that the market situation for USDJPY remains mixed: the dollar is supported by high US yields, but signals from the Bank of Japan and the risk of further policy tightening are limiting the US currency's advantage. At this stage, USDJPY continues its upward wave and is testing the 158.20 level.

The review of the September meeting published today showed that several board members support accelerating rate hikes or moving more quickly towards the neutral rate. The BoJ rate currently stands at 1.25% following the September increase.

Published Tankan data showed that sentiment among large Japanese manufacturers improved to 24, the highest level since 2018, while the services sector weakened and companies expect more challenging conditions in the coming months. This allows the BoJ to act more cautiously.

Despite weaker US inflation in August, Treasury yields remain high, while the dollar ended September with a notable gain. This is supporting demand for the US currency against the yen.

Tokyo and Washington previously agreed to continue coordinating to maintain controlled yen dynamics. Against this backdrop, excessive weakness in the Japanese currency remains a risk factor for USDJPY and could lead to another intervention.

Today's USDJPY forecast takes into account that high US yields continue to support interest in the dollar, while the possibility of further BoJ rate hikes and the Japanese authorities' readiness to curb excessive yen weakness are creating countervailing pressure.

Technical outlook

On the H4 chart, USDJPY formed a Hammer reversal pattern near the lower Bollinger Band and is trading around 158.20. Given that the pair remains within an ascending channel, it could continue the upward wave as the pattern signal plays out. The first upside target is 158.85.

At the same time, the USDJPY forecast also considers another market scenario. The pair could form a corrective wave and move towards 157.85 before the uptrend resumes.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (Intraday)
• Trend: bullish
• Key resistance levels: 158.85 and 160.00
• Key support levels: 157.85 and 155.30

USDJPY trading scenario for today

Trading scenario (Buy Stop)

Consolidation of USDJPY above the 158.85 resistance level would confirm the continuation of the uptrend and create conditions for opening long positions.

• Current price: 158.20
• Entry level: 158.85
• Take Profit: 160.00
• Stop Loss: 158.55
• Risk-to-reward ratio: above 1:3

The trade idea is valid until 08:00 AM on 2 October 2026 (server time, UTC+3).

Risk factors

The main risk to the bullish USDJPY scenario remains the wide interest-rate differential between the US and Japan and the possibility of intervention by the Japanese government in monetary policy.

Summary

The yen is losing ground, which could lead to intervention by the Japanese government. USDJPY technical analysis suggests a rise towards the 158.85 level after a correction.

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