USDJPY has been driven by shifting rate expectations through 2025. The pair sold off early in the year as markets priced Fed cuts, then recovered into summer on firm U.S. yields and a still-dovish BOJ. By August, momentum stalled again as yields dipped and the Fed hinted at easing.
Alongside the price chart, the U.S.–Japan 10Y yield spread offers important context. USDJPY generally tracks this spread: when U.S. yields rise faster than Japan’s, the wider gap supports USDJPY; when the spread narrows, the dollar loses its advantage, often leading to a weaker USDJPY.
Technically, price now sits in a consolidation channel. A break of the 20/50-day averages could expose 143.00 as support, while upside scenarios hinge on renewed yield strength or risk-off flows into the dollar.
Alongside the price chart, the U.S.–Japan 10Y yield spread offers important context. USDJPY generally tracks this spread: when U.S. yields rise faster than Japan’s, the wider gap supports USDJPY; when the spread narrows, the dollar loses its advantage, often leading to a weaker USDJPY.
Technically, price now sits in a consolidation channel. A break of the 20/50-day averages could expose 143.00 as support, while upside scenarios hinge on renewed yield strength or risk-off flows into the dollar.
Note
USDJPY has broken lower as weak US jobs data fuels expectations of Fed rate cuts. Markets now see a September cut as almost certain, narrowing the yield gap with Japan and weighing on the dollar.Note
In my earlier chart I forgot to show the 20/50-day moving averages. Here’s the updated view — price has now broken both to the downside, reinforcing the bearish momentum.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.