USD/JPY outlook: Upward momentum strengthens as the 155.00 support stays solid

crypthub

about 3 hours ago

Technical Outlook

USD/JPY continues to trade above the crucial 155.00 support, keeping the pair in a strong bullish channel in early 2025. The level, once resistance, now anchors price and has held through multiple weekly closes. Maintaining this floor suggests further upside toward the 158‑158.5 zone.

Key Levels & Indicators

Technical charts show the pair above the 50‑day and 200‑day EMAs, confirming trend strength. Higher lows and positive RSI readings reinforce a continuation bias, while a close below 154.80 would break the structure. The next resistance cluster lies at 158‑158.5, followed by the psychological 160 level.

Fundamental Drivers

The bullish bias stems from divergent monetary policies: the Fed keeps rates high and data‑dependent, whereas the BoJ remains accommodative after ending negative rates. This widens the U.S.–Japan yield gap, pulling capital into dollar‑denominated assets. Any shift toward tighter BoJ policy or aggressive Fed easing could narrow the differential and curb the rally.

Market Impact & Risks

A weaker yen aids Japanese exporters but raises import costs for households, affecting inflation and consumption. Strong USD/JPY often lifts other dollar crosses, reinforcing broader dollar strength. However, intervention risk rises near 160, and sudden risk‑off moves could trigger a rapid yen rebound.