Japanese Yen Extends Gains, Hits Highest Level in More Than Six Months
USD/JPY came under renewed selling pressure at the start of the week, falling more than 1% during Asian and European trading on Monday as the pair attempted to resume last week’s sharp downturn after a brief pause on Friday.
The Japanese yen has continued to recover from its multi-decade lows, supported initially by the Bank of Japan’s intervention in late July and further boosted by an increasingly hawkish shift in the central bank’s rhetoric. Markets are now pricing in a rate hike at the BoJ’s September policy meeting, with most economists expecting a 25-basis-point increase, although a larger 50-basis-point move remains a possibility. Improving sentiment toward long yen positions has also contributed to the currency’s strength.
Technically, the pair’s break below the key 155.20 support zone, marked by the lows of August 3 and September 3-4, has generated a fresh bearish signal. The move completes a bearish failure-swing pattern on the daily chart, while a sustained break beneath 154.78, the 38.2% Fibonacci retracement of the 139.88-163.98 rally, would further validate the downside outlook. Such a development would expose the next targets at the 152.00 area, which combines the January 25 low and the 50% retracement level, followed by 150.92, the spike high recorded on July 27, 2025.
Daily technical indicators remain firmly bearish, reinforced by the recent formation of a 10-day/200-day moving average death cross. However, oversold conditions could slow the pace of declines, particularly with strong support emerging from the top of the rising daily Ichimoku cloud around 154.26.
On the upside, immediate resistance is located at 154.78 and 155.20. Any stronger corrective rebounds are expected to face selling interest in the 156.50-156.75 region, a zone that should ideally cap gains and preserve the broader bearish outlook while offering more attractive levels for fresh short positions.
Res: 159.17; 159.35; 159.59; 160.00
Sup: 154.05; 153.06; 152.26; 151.93
