The tug-of-war between the Bank of Japan's gradual rate cuts and the Fed's rate cuts: Is 148.20 a trap or a springboard for USD/JPY?
2025-09-04 17:17:04
USD/JPY fluctuated around 148.20 during the European morning session on Thursday (September 4th). Stable equity markets weakened safe-haven buying, while interest rate differential expectations and domestic political uncertainty weighed on the yen. However, market expectations persisted that the Bank of Japan (BoJ) would normalize policy, supported by resilient wages, sticky inflation, and an improving outlook. Meanwhile, bets on a potential Federal Reserve rate cut this month limited the dollar's upward momentum, causing the exchange rate to oscillate around overhead resistance.
Bank of Japan Deputy Governor Ryozo Himino stated on Tuesday that global uncertainty remains elevated and the central bank is in no rush to significantly raise still-low financing costs. In contrast, Bank of Japan Governor Ueda reiterated on Wednesday that the central bank is prepared to continue raising interest rates if the economy and prices continue to perform as expected. Market bets are that another rate hike is possible this year, providing some support for the yen during Thursday's Asian trading session. Meanwhile, ruling party Secretary-General Hiroshi Moriyama expressed his intention to resign, raising questions about Prime Minister Shigeru Ishiba's leadership. Concerns about fiscal sustainability intensified, sending the 30-year Japanese government bond yield above 3% earlier this week, reaching a record high.
In the US, the Bureau of Labor Statistics released its JOLTS job openings data on Wednesday, showing 7.18 million job openings at the end of July, down from a previous reading of 7.35 million and below market expectations of 7.40 million. The weak data further fueled market speculation that the Federal Reserve will cut interest rates at its September 17th meeting, with at least two 25 basis point cuts this year. Next up, Thursday's ADP private sector employment and ISM services PMI data, along with Friday's non-farm payrolls (NFP) data, will drive the dollar's performance and inject new momentum into the exchange rate.
Looking at the 4-hour candlestick chart, the middle Bollinger Band is at 147.774, the upper Bollinger Band at 149.133, and the lower Bollinger Band at 146.415. The candlestick recently reached 149.134 before quickly retreating, forming a "top-touching retracement" to the upper band. The current price is around 148.20, above the middle band and below the upper band, indicating a neutral to strong trend but facing upward pressure. The Bollinger Band width is expanding modestly, indicating that volatility has rebounded from its lows but has not yet entered an accelerating phase.
At the price level, 148.773 is the first resistance above, above which is the strong resistance area of 149.133, and further up to 149.50; the support below is the horizontal dense area of 148.00, the support near the middle Bollinger band of 147.774, and the strong support is around 146.659/146.574 and the lower Bollinger band of 146.415.
In terms of indicator resonance, MACD shows DIFF=0.234, DEA=0.252, a slight "death cross" above the zero axis, and the histogram is -0.037 and narrowing, indicating that the momentum is in a state of oscillation and repair; RSI (14) is about 55.697, which is strong but not overbought. Comprehensively judging, the exchange rate is in the box range of 146.8-149.1. If it cannot effectively break through and stabilize on the upper track, the short-term trend tends to be a mean reversion path of "retracement-retracement to the middle track".
Short-term (next week): Ahead of the NFP, the exchange rate is likely to remain oscillating within the Bollinger Bands. If it breaks above 149.133 and stabilizes with two or three 4-hour candlestick charts, accompanied by a red and expanding MACD-Histogram, the market could enter a "breakout-retracement-extension" phase, targeting the extension zone above 149.50. If the upside is blocked and the RSI shows a top divergence near 60, a pullback to 148.00/147.774 is more likely.
—Bull scenario: Equity market is stable, NFP is not weak, BoJ tone is cautious and progress is slower than pricing. The probability of the exchange rate breaking through 149.13 and extending is increasing, but we need to be wary of the resistance cluster and false breakouts at 149.50-150.
— Bearish scenario: If US data weakens, the Fed releases a clearer easing outlook, and the BoJ emphasizes "promoting normalization as scheduled", the convergence of interest rate differentials and the decline in risk appetite will resonate, and the exchange rate may fall below 148.00 and test 147.774; if the MACD crosses below the zero axis and the RSI falls below 50, the downward leg is expected to be confirmed.
Fundamentals
Bank of Japan Deputy Governor Ryozo Himino stated on Tuesday that global uncertainty remains elevated and the central bank is in no rush to significantly raise still-low financing costs. In contrast, Bank of Japan Governor Ueda reiterated on Wednesday that the central bank is prepared to continue raising interest rates if the economy and prices continue to perform as expected. Market bets are that another rate hike is possible this year, providing some support for the yen during Thursday's Asian trading session. Meanwhile, ruling party Secretary-General Hiroshi Moriyama expressed his intention to resign, raising questions about Prime Minister Shigeru Ishiba's leadership. Concerns about fiscal sustainability intensified, sending the 30-year Japanese government bond yield above 3% earlier this week, reaching a record high.
In the US, the Bureau of Labor Statistics released its JOLTS job openings data on Wednesday, showing 7.18 million job openings at the end of July, down from a previous reading of 7.35 million and below market expectations of 7.40 million. The weak data further fueled market speculation that the Federal Reserve will cut interest rates at its September 17th meeting, with at least two 25 basis point cuts this year. Next up, Thursday's ADP private sector employment and ISM services PMI data, along with Friday's non-farm payrolls (NFP) data, will drive the dollar's performance and inject new momentum into the exchange rate.
Technical aspects:
Looking at the 4-hour candlestick chart, the middle Bollinger Band is at 147.774, the upper Bollinger Band at 149.133, and the lower Bollinger Band at 146.415. The candlestick recently reached 149.134 before quickly retreating, forming a "top-touching retracement" to the upper band. The current price is around 148.20, above the middle band and below the upper band, indicating a neutral to strong trend but facing upward pressure. The Bollinger Band width is expanding modestly, indicating that volatility has rebounded from its lows but has not yet entered an accelerating phase.
At the price level, 148.773 is the first resistance above, above which is the strong resistance area of 149.133, and further up to 149.50; the support below is the horizontal dense area of 148.00, the support near the middle Bollinger band of 147.774, and the strong support is around 146.659/146.574 and the lower Bollinger band of 146.415.
In terms of indicator resonance, MACD shows DIFF=0.234, DEA=0.252, a slight "death cross" above the zero axis, and the histogram is -0.037 and narrowing, indicating that the momentum is in a state of oscillation and repair; RSI (14) is about 55.697, which is strong but not overbought. Comprehensively judging, the exchange rate is in the box range of 146.8-149.1. If it cannot effectively break through and stabilize on the upper track, the short-term trend tends to be a mean reversion path of "retracement-retracement to the middle track".
Market Outlook
Short-term (next week): Ahead of the NFP, the exchange rate is likely to remain oscillating within the Bollinger Bands. If it breaks above 149.133 and stabilizes with two or three 4-hour candlestick charts, accompanied by a red and expanding MACD-Histogram, the market could enter a "breakout-retracement-extension" phase, targeting the extension zone above 149.50. If the upside is blocked and the RSI shows a top divergence near 60, a pullback to 148.00/147.774 is more likely.
—Bull scenario: Equity market is stable, NFP is not weak, BoJ tone is cautious and progress is slower than pricing. The probability of the exchange rate breaking through 149.13 and extending is increasing, but we need to be wary of the resistance cluster and false breakouts at 149.50-150.
— Bearish scenario: If US data weakens, the Fed releases a clearer easing outlook, and the BoJ emphasizes "promoting normalization as scheduled", the convergence of interest rate differentials and the decline in risk appetite will resonate, and the exchange rate may fall below 148.00 and test 147.774; if the MACD crosses below the zero axis and the RSI falls below 50, the downward leg is expected to be confirmed.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
