USD/JPY Forecast: 157.00 Support in Focus After BoJ Decision

The yen is finding support as investors assess the Bank of Japan’s policy outlook. In its October 30 monetary policy statement, the central bank maintained its short-term policy rate at around 1.25% by an 8–1 vote. Board member Hajime Takata dissented, proposing an increase to around 1.50% on the grounds that underlying inflation had reached the price stability target. The Bank’s accompanying outlook assessed underlying inflation as broadly consistent with its 2.0% objective, keeping further policy normalisation in focus without confirming a December increase. Meanwhile, national September CPI data, released on October 23, showed annual headline inflation of 2.1%, while inflation excluding fresh food and energy stood at 2.4%. The separate October Tokyo report, released on October 30, showed headline inflation of 2.8%, compared with 2.7% in September.

The US dollar has softened following the Federal Reserve’s decision to leave its target range unchanged at 3.75–4.00%, with the US Dollar Index (USDX) near 101.40 in the original market snapshot. Investors are also assessing mixed technology-sector earnings and the returns on substantial investment in artificial intelligence. Amazon’s results highlighted strong cloud growth alongside pressure on free cash flow from capital spending, while Intel reported higher quarterly revenue. These developments have contributed to uncertainty across financial markets, although they do not establish a direct flow of capital from equities into bonds or a uniform effect on the dollar. The Fed’s next scheduled decision on December 9 remains an important catalyst, with further tightening dependent on incoming data. The role of relative monetary policy expectations was also discussed in our previous USD/JPY forecast.

Support and Resistance Levels

On the daily chart, the pair is correcting lower toward the support line of a descending channel with boundaries at 158.50–155.70.

Technical indicators are strengthening their sell signal: the fast exponential moving averages (EMAs) of the Alligator indicator are slightly below the slow ones, while the Awesome Oscillator (AO) histogram is forming corrective bars in negative territory.

Support levels: 157.00, 155.00.

Resistance levels: 158.10, 160.10.

USD/JPY Trading Scenarios and Exchange Rate Forecast

Short positions may be opened after the price declines and consolidates below 157.00, with a target at 155.00. Stop-loss: 158.00. Estimated holding period: 7 days or more.

Long positions may be opened after the price rises and consolidates above 158.10, with a target at 160.10. Stop-loss: 157.20.