USD/JPY holds near 154.65 amid Bank of Japan policy uncertainty

In October, the key interest rate remained unchanged at 0.50%, despite calls from U.S. officials and analysts to raise it. The decision was likely influenced by Japan’s new Prime Minister, Sanae Takaichi, who favors a flexible approach — preferring currency interventions over interest rate adjustments to support the yen. Officials currently view interventions as the primary tool, especially since Japan’s current account surplus reached a 20-year high of 4.35 trillion yen in September, well above the previous 2.38 trillion yen. The improvement was driven by lower imports of energy commodities such as crude oil and coal, and a rise in semiconductor equipment exports to other Asian markets. Excluding seasonal factors, the balance rose from 3.701 trillion to 4.483 trillion yen. These figures confirm the stability of Japan’s economy and could justify a more hawkish tone from the Bank of Japan, though analysts warn of potential political pressure from Takaichi.

The U.S. dollar index (USDX) is trading near 99.40. The U.S. government shutdown could end this week following Senate approval of a temporary funding bill, though the question of extending healthcare subsidies expiring at year-end still needs discussion. House Speaker Mike Jones plans to send the bill to President Donald Trump for signature today, after which investors expect the release of new macroeconomic data. The key focus is on labor market figures: ADP reports show an average weekly decline of 11,250 jobs, indicating ongoing weakness. Meanwhile, the probability of a 25-basis-point Fed rate cut in December stands at just 65.4%, according to the CME FedWatch Tool.

Support and Resistance Levels

On the daily chart, the price is moving within an upward trend, attempting to approach the resistance line of the ascending channel, with boundaries at 156.00–148.50.

Technical indicators continue to signal buying: the fast EMAs of the Alligator indicator remain above the signal line, while the Awesome Oscillator (AO) forms correction bars in the positive zone.

Resistance levels: 155.50, 158.40.

Support levels: 153.30, 150.40.

Trading Scenarios

Long positions may be opened after the price rises and consolidates above 155.50, with a target at 158.40. Stop-loss — 154.00. Expected duration: 7 days or more.

Short positions may be opened after the price declines and consolidates below 153.30, with a target at 150.40. Stop-loss — 154.50.