USDJPY Daily Forecast USD/JPY has gathered strong momentum, reflecting a net plus session number six in the last eight days, and penetration beyond the level of 156.50 for the first time since the year 2023.02.09. The pairs latest upside trend has allowed it to break above the 20, 50, and 100-day simple moving averages (SMA), which is indicative of powerful bullish momentum. Besides this, USD/JPY is still way above the current rising trendline taken from October 2025, thus this further confirms the uptrend. One of the major reasons for the yens loss of ground is the leak of the information in Japanese media that Prime Minister Sanae Takaichi raised the issue of the Bank of Japan (BoJ) possibly deciding to hike rates further with the BoJ Governor Kazuo Ueda at their meeting on 17 February. Takaichis fiscal stimulus program will likely be a strong obstacle to the BoJ tightening even if inflation remains well above 2%, the BoJs target level. This indecision over the direction of BoJ policy has been a major factor in the yens plight; thus, the currency has been susceptible to further losses. However, over in America, Federal Reserve Governor Christopher Wallers remarks have recently given more weight to the dollar. Waller mentioned that maintaining interest rates in March could be on the table if Februarys employment figures prove the labor markets continued strength in line with Januarys nonfarm payrolls, which turned out to be stronger than expected. The data for January showed that the number of jobs increased by 130k, which was a positive surprise. Waller said he would be inclined to hold back a rate hike if Februarys figures are strong, although in January he voted for a rate reduction. This update in expectations has reduced the markets pace for Fed rate cuts, with the present pricing showing a total easing of around 55 basis points in 2026, as compared to 65 basis points at the beginning of February. From a technical standpoint, the momentum of the USD/JPY pair is somewhat contradictory. On the one hand, the RSI has moved above the neutral level and is slowly going towards the overbought area, which is usually indicative of a bullish trend. On the other hand, the stochastic oscillators %K line is close to flattening in the overbought area and is just a bit above its %D line, which means that although the pair is still bullish, the momentum might be losing strength a bit. The MACD, however, still lies in slightly negative territory, which indicates that the market players are likely to adopt a more cautious attitude with a mild bearish momentum. In case of a continued rally by the USD/JPY, the bulls may encounter the resistance of the upper Bollinger band at around 157.50. If the price manages to break this level, the next target could be the strong resistance at 159.40, just below 160. This level was last seen in January. These levels could put a stop to the bullish moves. However, should the yen start to strengthen again, the USD/JPY pair could retest the 155.00 level, where the 20- and 100-day SMAs meet. Should this support fail, the pair may look for more support at 153.00, where the currently prevailing ascending trendline crosses the price action. Overall, USD/JPY has been going up, reflecting market anticipations that the BoJs interest rate hike cycle might be delayed or less aggressive, whereas the Fed seems to be in no hurry to ease the policy either. The pair could potentially reach the 157.50 level very soon if the upward trend persists, with 159.40 regarded as a major resistance area. On the other hand, a change in the yens luck might trigger a correction, with the first support at 155.00 and stronger support at 153.00.
