At its last meeting, the regulator kept the interest rate at 0.50% and continued reducing bond purchases, citing moderate economic recovery with solid domestic demand but weakness in external trade. Inflation remains between 3.0–3.5%, yet the 2.0% target is still uncertain. Going forward, officials plan to cautiously raise borrowing costs, considering external risks and rising food prices. Following some “hawkish” comments from board members, the pair reversed its upward move.
The yen is also supported by macroeconomic data: the September coincident index improved from 34.9 to 35.3, beating forecasts of 35.2, while building permits jumped from –19.0% to 38.9%. However, housing starts fell by 9.8%, worse than expectations of –4.8% and the previous –9.7%. Now investors are focused on the October 30 BoJ policy meeting, where rates are expected to rise by 25 basis points to 0.75%, potentially reinforcing the pair’s long-term bearish trend.
The US dollar declined by 0.54% in the USDX amid the government shutdown: the Senate failed to pass funding bills, halting federal operations. President Donald Trump sees this as an opportunity for radical reform, with the White House suggesting not just unpaid leave but possible mass layoffs and cutting Democratic-backed programs.
Support and Resistance Levels
The long-term trend remains bearish: last week the instrument broke resistance at 148.85 but has since returned below it, now targeting 146.33 and 142.50. A reversal above 148.85 would open the path to the July high at 150.70.
The medium-term trend is bullish: last week the price rebounded from the 145.47–144.96 support area, reaching 147.93. After surpassing the July high at 150.90, the next upside target could be zone 2 (152.14–151.59). However, if support breaks, the medium-term bias will flip bearish, making shorts toward 140.40–139.93 relevant.
Resistance levels: 148.85, 150.70, 154.80.
Support levels: 146.33, 142.50, 140.25.
Trading scenarios and USD/JPY forecast
Short positions can be opened from 147.80 with a target of 145.50 and a stop loss at 148.85. Implementation horizon: 9–12 days.
Long positions can be considered above 148.85 with a target of 150.70 and a stop loss at 148.15.
Scenario
| Timeframe | Weekly |
| Recommendation | SELL LIMIT |
| Entry Point | 147.80 |
| Take Profit | 145.50 |
| Stop Loss | 148.85 |
| Key Levels | 140.25, 142.50, 146.33, 148.85, 150.70, 154.80 |
Alternative Scenario
| Recommendation | BUY STOP |
| Entry Point | 148.90 |
| Take Profit | 150.70 |
| Stop Loss | 148.15 |
| Key Levels | 140.25, 142.50, 146.33, 148.85, 150.70, 154.80 |