USD/JPY Back Above 157 as Markets Reprice Fed Rate Outlook

Traders' Opinions

Summary:

USD/JPY rebounds above 157.00 as rising Oil prices and strong US jobs data support the Dollar, though fears of further Japanese intervention continue to limit gains.

BUY USDJPY

EXP

TRADING

157.099

Entry Price

162.000

155.400

157.614 +0.013 +0.01%

0.0

Pips

Flat

155.400

Exit Price

157.099

Entry Price

162.000

The US Dollar rebounded against the Japanese Yen on Monday, with USD/JPY climbing back above the 157.00 mark as surging Oil prices and renewed geopolitical tensions boosted demand for the Greenback. The pair recovered from Friday’s pullback after US President Donald Trump dismissed Iran’s latest peace proposal as “totally unacceptable,” dampening hopes for a near-term resolution to the conflict and delaying expectations for the reopening of the Strait of Hormuz.

The renewed uncertainty sent crude prices sharply higher, with WTI rising toward $94.50 per barrel while Brent climbed back above the key $100 level. In my view, the rally in Oil continues to weigh heavily on the Yen, given Japan’s dependence on imported energy, while simultaneously reinforcing the Dollar’s relative strength.

The Greenback also remains supported by stronger-than-expected US labor market data released on Friday. Nonfarm Payrolls showed the US economy added 115,000 jobs in April, significantly above forecasts of 62,000, easing concerns about a sharp slowdown and reinforcing expectations that the Federal Reserve may keep interest rates elevated for longer.

Still, upside momentum in USD/JPY remains tempered by persistent intervention risks from Tokyo. Japanese authorities are suspected of spending nearly ¥10 trillion over recent weeks to stabilize the Yen after the pair surged beyond the psychologically critical 160.00 level. Investors are also closely watching next week’s visit by US Treasury Secretary Scott Bessent to Tokyo, where currency volatility and Yen weakness are expected to be key discussion points.

Technical Analysis

From a technical perspective, USD/JPY remains entrenched in a broader bullish structure despite the recent corrective pullback from the 160.00 region. On the daily chart, the pair continues to trade above a long-term ascending trendline that has guided price action higher since April 2025, reinforcing the underlying upward momentum. The latest decline toward the 156.00–156.50 area appears to be a retest of this major dynamic support rather than a full-scale trend reversal.

Price action suggests buyers are attempting to defend the ascending trendline aggressively, with the pair already rebounding back toward 157.10 at the time of writing. The 156.00 zone now stands out as a critical near-term support level. A sustained break below this region would weaken the bullish structure and could expose deeper downside targets near 154.00 and potentially the psychological 152.00 handle, where previous consolidation and buying interest emerged earlier this year.

However, as long as USD/JPY holds above the ascending support line, the broader bias remains tilted to the upside. The pair continues to form higher lows on the daily timeframe, signaling that bullish market structure remains intact despite heightened volatility tied to intervention fears and geopolitical developments.

On the upside, traders are closely monitoring the 160.00 psychological barrier, which has repeatedly acted as a major resistance zone and intervention trigger for Japanese authorities. A decisive breakout above 160.00 would likely reignite bullish momentum and open the door toward 162.00 initially, followed by a potential extension toward the 166.00 region highlighted on the chart projection. Such a move would reinforce the longer-term uptrend and likely attract renewed momentum buying.

Momentum indicators continue to favor a constructive outlook despite signs of temporary cooling. The Relative Strength Index (RSI) has likely eased from overbought territory and is hovering near neutral-to-positive levels, suggesting that bullish momentum has moderated without fully reversing. This indicates the recent decline may represent consolidation within an ongoing uptrend rather than the beginning of a bearish cycle.

Meanwhile, the Moving Average Convergence Divergence (MACD) appears to be flattening after prior bullish expansion, reflecting slowing upside momentum in the short term. Nevertheless, as long as the MACD remains above the zero line, the broader bullish trend remains technically supported.

In my view, the current setup favors a continuation higher, particularly if the pair successfully holds above the ascending trendline support. The rebound from the 156.00 region suggests dip buyers remain active, while the macro backdrop of yield differentials and persistent Yen weakness continues to favor the Dollar over the longer term.

TRADE RECOMMENDATION

BUY USD/JPY

ENTRY PRICE: 157.10

STOP LOSS: 155.40

TAKE PROFIT: 162.00

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USD/JPY Back Above 157 as Markets Reprice Fed Rate Outlook

Technical Analysis

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