Yen loses safe-haven demand as USDJPY eyes 159.00 again

USDJPY is recovering amid waning demand for safe-haven assets and expectations that the Bank of Japan will leave interest rates unchanged this week. The pair is currently trading at 157.91. Read more in our analysis for 28 October 2026.

USDJPY forecast: key takeaways

• Improving risk appetite and optimism surrounding AI are reducing demand for the Japanese yen
• The Bank of Japan is expected to keep its interest rate at 1.25%, although accelerating inflation supports the possibility of a rate rise in December
• USDJPY forecast for 28 October 2026: 159.03

Fundamental analysis

USDJPY is recovering towards 158.00 as demand for the Japanese yen as a safe-haven asset weakens. Investor sentiment received a boost from renewed momentum in the technology sector following SK Hynix's strong earnings report and the company's announcement of increased shareholder payouts thanks to AI-related profit growth.

The currency market's attention is now shifting to the Bank of Japan meeting. The regulator is expected to hold its interest rate at 1.25%, but investors will closely assess signals about its next move. December remains the most likely time for another rate rise if inflationary pressure persists.

The latest data confirm that price risks remain above average. One of Japan's key measures of services inflation accelerated to 3.7% year-on-year in September, its highest level since June 2024. Rising labour, transport and fuel costs increase the likelihood that the Bank of Japan will continue normalising monetary policy.

In the short term, however, the yen remains sensitive to global risk appetite and the interest rate differential between the US and Japan. Decisions by other major central banks this week could also affect bond yields and determine USDJPY's next direction.

The USDJPY forecast for 28 October 2026 is bullish.

Technical outlook

USDJPY continues to recover after rebounding from the 156.30 area. Prices have formed a short-term ascending channel and returned above the middle Bollinger Band. Today's USDJPY forecast anticipates further gains following consolidation above local resistance at 158.27, with a potential target at 159.03.

The MACD has risen above zero, with its main line above the signal line, confirming a recovery in bullish momentum. However, the Stochastic Oscillator is in overbought territory and has formed a bearish crossover, allowing for a local correction before another attempt to rise. A decisive breakout above 158.27 would provide further confirmation of the main scenario.

The bullish scenario would be invalidated by a decline below support at 157.47 and a breakout from the ascending channel. In that case, selling pressure would intensify, with the next targets at 157.08 and 156.69.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (intraday)
• Trend: upward
• Key resistance levels: 158.27 and 159.03
• Key support levels: 157.47 and 156.69

USDJPY trading scenario for today

A breakout above local resistance, followed by USDJPY consolidating above 158.27, would create conditions for opening long positions and confirm the continuation of bullish momentum.

Risk factors

The main risk to the bullish USDJPY scenario remains more hawkish rhetoric from the Bank of Japan and growing expectations of a December rate rise, which could revive demand for the yen. Overbought conditions on the Stochastic Oscillator pose an additional technical risk. Consolidation below 157.47 would indicate weakening bullish momentum and increase the likelihood of a correction towards 156.69.

Summary

The USDJPY forecast for 28 October 2026 indicates that bullish momentum remains intact, with a potential upside target at 159.03 and further confirmation from a breakout above 158.27.

Editors’ picks

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

The EURUSD outlook for 2026 and 2027: key levels on the daily chart, three trading scenarios and the policy gap between the Fed and the ECB that drives the pair.

Gold (XAUUSD) forecast 2026: technical analysis, price levels & predictions

Where gold could trade in 2026: key levels, three trading scenarios with entry triggers and the forecasts from J.P. Morgan, Deutsche Bank and Goldman Sachs.

Open Account