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      USD/JPY Rebounds Above 160 as BoJ Hawkish Tone Fails to Sustain Yen Rally

      Traders' Opinions
      Summary:

      The Japanese Yen surrendered early gains after the Bank of Japan left interest rates unchanged despite signaling further policy tightening. Markets also reacted to confirmation that Japanese authorities coordinated closely with the US during recent intervention efforts, while traders increased expectations for another BoJ rate hike later this year.

      Buy USDJPY
      End Time
      CLOSED

      160.401

      ENTRY

      173.000

      TGT

      157.800

      SL

      157.718 +0.303 +0.19%

      2601

      Points

      Loss

      157.800

      SL

      157.800

      CLOSING

      160.401

      ENTRY

      173.000

      TGT

      The Japanese Yen (JPY) weakened against the US Dollar (USD) on Friday, with USD/JPY reclaiming the 160.00 level after swinging nearly 240 pips between 158.60 and 161.00. The Yen initially strengthened after the Bank of Japan (BoJ) maintained its policy rate at 1.00% while signaling that further interest rate hikes remain on the table, but the rally faded as traders locked in profits and the US Dollar recovered.
      BoJ Governor Kazuho Ueda said Japan is moving "in the same cycle as US and European central banks" and warned that medium- to long-term inflation expectations are rising, reinforcing expectations for additional policy tightening. Meanwhile, Japan's top currency diplomat, Atsushi Mimura, fueled intervention speculation by confirming close coordination with US authorities following Thursday's sharp 400-pip Yen rally.
      Brown Brothers Harriman described the BoJ decision as a "hawkish hold," noting that policymakers continue to signal further normalization. Swap markets now price around a 40% probability of a September rate hike, up from roughly 20% before the meeting.

      Technical AnalysisUSD/JPY Rebounds Above 160 as BoJ Hawkish Tone Fails to Sustain Yen Rally_1

      USD/JPY remains firmly within a long-term bullish trend despite the recent sharp pullback. The decline has brought price back to a key confluence area where the ascending trendline intersects with the 160.40 horizontal support, a level that previously acted as resistance before turning into support. Buyers have responded immediately from this zone, suggesting the broader uptrend remains intact.
      Rather than signaling a trend reversal, the latest sell-off appears to represent a retest of the breakout level, with price attempting to establish a higher low above the rising trendline. Holding above this confluence would strengthen the bullish structure and increase the likelihood of another impulsive move higher.
      If buyers continue defending the 160.40 support, USD/JPY could first challenge the recent swing high near 164.00. A successful break above that barrier would confirm the continuation of the primary uptrend and expose the 166.80 region, followed by the longer-term objective around 173.00.
      Conversely, a daily close beneath the ascending trendline and the 160.40 support level would weaken the bullish outlook and signal that a deeper corrective phase is underway. In that scenario, the pair could retreat toward the 158.00 area before stronger buying interest re-emerges.

      TRADE RECOMMENDATION

      BUY USD/JPY
      ENTRY PRICE: 160.40
      STOP LOSS: 157.80
      TAKE PROFIT: 173.00
      Risk Warnings and Investment Disclaimers
      You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

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      Warren Takunda

      Analysts

      Warren Takunda, a seasoned finance leader specializing in the Middle East, is a trusted senior analyst with a proven track record. As head of the finance team, he excels in financial planning, analysis, and reporting. Warren's expertise in financial modeling and investment analysis delivers valuable insights to clients.

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      P/L Ratio

      0.74

      Focus on

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