USD/JPY climbed to an intraday high of 156.41 after the Federal Reserve raised rates 25 basis points to 3.75%-4.00%, its first hike since 2023. The pair now tests 156.13/50 resistance ahead of the Bank of Japan's rate decision on Friday, September 18, 2026, where Governor Ueda's guidance matters more than the widely expected hike itself.
USD/JPY climbed to an intraday high of 156.41 on Wednesday, September 16, 2026, during the US session, after the Federal Reserve raised its policy rate 25 basis points to 3.75%-4.00%, its first increase since 2023. The pair is now testing the 156.13/50 resistance zone, with the Bank of Japan's own decision due Friday, September 18.
Hawkish Fed projections widen the yield gap
The Fed's latest projections showed 12 of 18 policymakers expect another rate hike before the end of 2026, while rates are projected to hold steady through 2027. The Fed also raised its 2026 core PCE inflation forecast to 3.4% and lifted its estimate of the longer-run policy rate to 3.2%. As a result, Fed funds futures now assign about a 90% probability of another hike by year-end, which lifted the US Dollar Index to a seven-week high.
This matters for USD/JPY because the US-Japan yield differential remains positive. Even if the Bank of Japan raises rates Friday, the yen may struggle to attract sustained demand unless markets also bring forward expectations for subsequent Japanese increases.
Japan's inflation data sets the stage before the BoJ
Japan releases August inflation data before the BoJ's decision, with core-core CPI, which excludes fresh food and energy, expected to hold at 1.9% year-on-year. The BoJ is widely expected to raise its policy rate 25 basis points to 1.25%, its highest level in 31 years, following June's increase to 1.00%. Since the hike is largely priced in, Governor Ueda's press conference should be the more significant catalyst for the yen.
A hawkish message would signal further increases are likely, flag second-round inflation effects from energy prices and yen weakness, and note the policy rate remains below neutral. A dovish message emphasizing downside growth risks or weak consumption could instead let USD/JPY extend its post-FOMC rebound.
Technical levels to watch
The pair's 2.3% rally from the September 8 intraday low of 152.89 has hit an inflexion zone that marks the pullback resistance of a former "Head & Shoulders" neckline. A break below the 155.45 near-term support could expose 154.47, 153.70 and 152.65/55, while an hourly close above 156.50 would shift focus to the 157.20 medium-term resistance.
Source: ActionForex
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