USD/JPY Pullback Halted as Traders Eye Yearly Highs

USD/JPY is trading just under 157.00 this Monday as the pair remains supported by concerns over Japan’s fiscal outlook and the government’s large-scale stimulus package, which is keeping Japanese bond yields elevated and weighing on the currency. At the same time, the greenback isn’t doing well otherwise, as Federal Reserve officials indicating that a near-term rate cut is likely is weighing on the U.S. Dollar versus other majors.

Looking ahead, the key drivers are any signals of intervention from Japanese authorities and the release of U.S. economic data that could shift Fed expectations in the holiday-shortened week. The pair remains tilted to the upside for now, but risks are rising that the Yen could find support if Tokyo steps in or if U.S. data comes in weaker than expected.

USD/JPY Daily Price History

In the above chart, USD/JPY rates are exhibiting behavior like what they did in late-October: hitting a former key swing level, pulling back, then resuming the uptrend. This time, USD/JPY’s rally to the 2025 highs was cut short, but dip buyers have reappeared to keep bullish momentum intact. The pair remains well-supported by uptrends in both the 20-day exponential moving average (EMA) and 50-day EMA. Another attempt at the yearly high at 158.88 can’t be ruled out, although at that time intervention would seemingly become a more serious threat.

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