USDJPY At A Two-week High: The Rebound Is Progressing Successfully

The USDJPY pair has risen to a two-week peak at 157.02. The market is awaiting political news and Japanese GDP data.

USDJPY forecast: key takeaways

Fundamental analysis

The USDJPY pair is holding near 157.02 on Thursday. The yen is hovering close to its weakest levels in almost two weeks and has lost around 1% since the start of the week. This comes ahead of elections to the lower house of parliament, which will take place this weekend.

Japan's ruling Liberal Democratic Party, led by Prime Minister Sanae Takaichi, is expected to strengthen its position as it seeks voter support for increased government spending and other economic policy priorities. Since Takaichi took office, Japanese government bonds and the yen have remained under pressure. The shift towards expansionary fiscal policy has heightened concerns about the country's debt sustainability.

Markets are also awaiting the release of Japan's Q4 GDP data next week. The forecast suggests an economic recovery after a sharp contraction in the previous quarter. Earlier, Takaichi stated that a weak yen could benefit exporters. She later clarified that her comments referred to the need to build an economy resilient to currency fluctuations.

At the end of January, the yen rose by nearly 4.5% amid speculation about a possible joint currency intervention by the US and Japan. Since then, it has lost more than half of those gains.

The USDJPY outlook is favourable.

Technical outlook

On the H4 chart, following the sharp sell-off in late January, the USDJPY pair formed a local bottom in the 152.0–152.2 area and has since shifted into a recovery phase. The rise is impulsive. The price has confidently returned within Bollinger Bands and is moving along their upper boundary, indicating buyer dominance.

Currently, quotes are testing the 156.8–157.1 zone. This area represents a key resistance level that previously acted as support. A consolidation above this range would open the way towards 158.5–159.0. In the event of a pullback, the nearest support level will shift to 155.6 and then to 153.7. Overall, the structure after the January sell-off appears to be recovering, but the pair has reached a technically sensitive zone.

USDJPY overview

USDJPY trading scenarios for today

Main scenario (Buy Stop)

A consolidation above 157.70 will confirm a breakout above the key resistance zone and indicate a continuation of the recovery move after the January sell-off. In this case, focus shifts towards the upper target near 159.30.

The risk-to-reward ratio is around 1:4. The upside potential is about 160 pips with a risk of approximately 40 pips.

Alternative scenario (Sell Stop)

A breakout and consolidation below the 155.40 support level would indicate weakening bullish momentum and increase the risk of a deeper correction after a failed upside attempt.

Risk factors

Risks to further USDJPY gains include the upcoming elections in Japan and potential comments from authorities regarding the yen, which could increase volatility and demand for safe-haven assets. Additional pressure on the pair may come from expectations surrounding Japan's Q4 GDP release if the data points to a stronger economic recovery. Technically, the 156.8–157.1 area remains a sensitive resistance zone, where corrective profit-taking is possible.

Summary

The USDJPY pair continues to recover from the January sell-off, but important political news from Japan lies ahead. The USDJPY forecast for today, 5 February 2026, does not rule out a move above 157.70, with a shift in focus towards 159.30.

Source: RoboForex