USD/JPY HITS A WALL AT 160.00 AS TOKYO STANDS READY TO ACT
According to RoboForex, USD/JPY remains caught between Japanese authorities’ intervention stance and expectations for US Federal Reserve interest rates. Japanese Finance Ministry officials have indicated that Tokyo and Washington remain prepared to act again if necessary, while the 160.00 area is viewed by the market as a red line.
Despite the US September CPI rising to 3.7% year-on-year, above expectations, markets do not expect an immediate Fed rate hike at the October meeting. RoboForex notes that the probability of an October hike is around 40% or less, while the BoJ is opposed to another rate hike at its October meeting. Markets are pricing an approximately 88%–90% probability of a BoJ rate hike in December.
Today’s focus is on US PPI, which could provide the next catalyst for USD/JPY and further clues on the Federal Reserve’s policy path.
From a technical perspective, RoboForex’s analysis shows USD/JPY recently reached resistance at 158.91 before entering a corrective decline. The pair returned to 157.57, which previously acted as the centre of consolidation and is now the main support reference. A move above 158.28 would bring 158.91 back into focus, followed by 160.06.
On the H1 chart, the Stochastic oscillator has moved out of oversold territory, with its signal lines turning higher. Meanwhile, the MACD remains in positive territory, although its shrinking histogram suggests weaker upward momentum.
A break below 157.57 would shift focus to 157.24, followed by 156.47.
For market participants, the key factors remain USD/JPY, the 157.57 support level, 158.28 and 158.91 resistance levels, the 160.00 market red line, US PPI, the around 40% or lower October Fed hike probability, the 88%–90% December BoJ hike probability, and the 157.24–156.47 downside levels, which may provide further context for the pair’s near-term direction.
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