USDJPY near 160.00: the Fed pressures the yen, while the BoJ prepares a response

The risk of currency intervention by the BoJ is gradually increasing. The USDJPY rate currently stands at 160.00. For more details, see our analysis for 2 September 2026.

USDJPY forecast: key takeaways

• The BoJ will carefully assess rising inflation risks
• The likelihood of a Federal Reserve interest rate hike in September is estimated at around 68%
• The risk of currency intervention by the BoJ is increasing
• USDJPY forecast for 2 September 2026: 160.75 or 159.40

Fundamental analysis

Fundamental analysis for 2 September 2026 shows that the yen continues to lose ground ahead of US data and is testing the 160.00 level.

BoJ Governor Kazuo Ueda said that the regulator would closely assess heightened inflation risks at the 17–18 September meeting. This increased expectations of an interest rate hike.

Following comments from the Federal Reserve chairman, the likelihood of a September interest rate hike is estimated at around 68%. This supports the US dollar and maintains a substantial interest rate differential between the US and Japan.

US Treasury Secretary Scott Bessent, following a meeting with Ueda, stressed the need for decisive action to address the excessive weakening of the yen. This is fuelling expectations of a more active BoJ monetary policy stance and raising the risk of further currency intervention by the Japanese government.

Despite some weak US economic indicators, the market continues to expect tighter monetary policy from the Federal Reserve. Against this backdrop, upcoming employment data could significantly change expectations for the September decision.

Today’s USDJPY forecast takes into account that the US dollar is supported by expectations of a Federal Reserve rate hike and geopolitical demand for safe-haven assets, while the BoJ’s hawkish stance, pressure from Washington on Tokyo, and the risk of currency intervention create significant obstacles to further yen weakness. The main trigger this week is the September policy decisions by the Federal Reserve and the BoJ, along with upcoming US labour market data.

Technical outlook

On the H4 chart, the USDJPY pair has formed an Inverted Hammer reversal pattern near the lower Bollinger Band and is currently trading around 160.00. Since the price is moving within an ascending channel, it may continue its upward wave as the pattern signal plays out, with the first upside target at 160.75.

At the same time, the USDJPY forecast also considers an alternative market scenario in which the USDJPY rate could form a correction and head towards 159.40 before resuming its rise.

USDJPY overview

• Asset: USDJPY
• Timeframe: H4 (intraday)
• Trend: bullish
• Key resistance levels: 160.75 and 161.50
• Key support levels: 159.40 and 158.05

USDJPY trading scenarios for today

Main scenario (Buy Stop)

Consolidation above the 160.75 resistance level would confirm a continuation of the upward wave and create conditions for further USDJPY growth.

• Current price: 160.00
• Entry level: 160.75
• Take profit: 161.50
• Stop loss: 160.50
• Risk-to-reward ratio: 1:3

Alternative scenario (Sell Stop)

A breakout and consolidation below the 159.40 support level would indicate a correction and create conditions for opening short USDJPY positions.

• Entry level: 159.40
• Take profit: 158.05
• Stop loss: 159.60
• Risk-to-reward ratio: around 1:6

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

Risk factors

The main risks to further USDJPY growth include growing expectations of a September rate hike by the Bank of Japan and the possibility of another currency intervention if the pair sustains a move above 160.00. At the same time, the interest rate differential between the US and Japan, expectations of a Federal Reserve rate hike, fiscal risks in Japan, and high oil prices continue to limit the yen’s upside potential.

Summary

The yen continues to lose ground amid growing expectations of monetary policy tightening in the US and Japan. Today’s USDJPY technical analysis suggests a rise towards 160.75.

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