The yen surged nearly 2% on Thursday, touching a one-month high near 155.28, as traders raised bets on a Bank of Japan hike. A stronger-than-expected US jobs report has since muddied the Fed's own rate path, leaving USD/JPY caught between two undecided central banks.
The yen surged nearly 2% in a single session on Thursday, touching a one-month high near 155.28. The move came as traders raised the odds of a Bank of Japan hike and stayed alert to renewed intervention risk following July's joint US-Japan operation.
BoJ signals feed yen strength
Bank of Japan board member Hajime Takata has floated the possibility of outsized or back-to-back rate hikes to contain inflation, and Governor Ueda's comments this week reinforced expectations of a move as early as this month. That combination has given the yen genuine independent strength, rather than gains that depend solely on dollar weakness.
Fed's own path stays undecided
The dollar side offers no clean counter-narrative. August's jobs report reshaped the Fed debate almost overnight, with payrolls coming in well above the 55,000 consensus, briefly reviving September hike bets that had cooled after Fed Governor Waller signalled comfort with holding rates if inflation keeps easing. Markets are now split roughly 50–60% on a September move, leaving Chair Kevin Warsh's guidance and this week's CPI and PPI prints as the tie-breakers.
Support at 155.00 tested
USD/JPY has broken sharply below its long-term ascending trendline, with price now sitting at the 155.00 support zone after rejecting the confluence of the descending trendline, the 100 EMA, and resistance near 160.00. Should buyers defend the 155.00–156.00 support zone and reclaim the descending trendline, the path opens toward the 100-period EMA near 159.50, with a stronger recovery targeting the 160.00–161.00 zone that has capped rallies since May. A confirmed break below 155.00–156.00 instead exposes the pair to the 152.00–153.00 zone, the low that anchored the 2026 uptrend.
Source: ActionForex
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