On Friday (November 7), the USD/JPY exchange rate fell back to 153.10 during the European session. Amid rising risk aversion, the yen preserved some of its recent gains. Concerns that artificial intelligence stocks may be overvalued increased stock market volatility, prompting investors to turn to traditional safe-haven assets, thus providing support for the yen.



The overall weakening of the US dollar further increased downward pressure on the currency pair. Signs of a cooling US labor market reinforced market expectations of an imminent interest rate cut by the Federal Reserve.

Domestic data from Japan presents a mixed picture. Consumer spending rose modestly by 1.8% in September, compared to 2.3% in August and falling short of the expected 2.5%. Nominal wage growth accelerated to 1.9%, but real household income continued to decline, falling 1.4% year-on-year. This marks the ninth consecutive month of decline in real income, highlighting the continued pressure on purchasing power.

In response, Bank of Japan Governor Kazuo Ueda stated that wage growth expectations for 2026 will be a key factor in determining whether the central bank will resume interest rate hikes. Currently, the Bank of Japan maintains an accommodative stance and has not adjusted its monetary policy.

Technical Analysis

4-hour chart



On the 4-hour chart, USD/JPY is consolidating around 153.33. This range is expected to widen downwards in the short term, targeting 152.20. The primary scenario then favors an upward breakout, initiating a new bullish trend with a target of 155.70. An alternative scenario, a downward breakout, would require a deeper pullback to 149.90 before a sustained rebound can begin. The MACD indicator supports this view, with its signal line below the zero line and trending downwards, confirming the current downward momentum.

1-hour chart



On the 1-hour chart, the currency pair is currently undergoing a pullback after rebounding from below to test 153.50, and has formed a narrow consolidation range around that level. A downward breakout from this range is expected initially, with a target of 152.52, followed by a potential rebound to 153.50. Subsequent movement depends on the direction of the breakout: an upward breakout would open a path to 155.70, while a downward breakout could extend the pullback to 149.90. The candlestick has crossed below the D-line, forming a death cross, and the J-value is near the 0 range, suggesting short-term oversold conditions and a potential rebound, but the overall weakness remains unchanged.

in conclusion

The USD/JPY pair is influenced by both a weakening dollar and mixed signals from within Japan. The short-term driver is risk sentiment providing temporary support for the yen. Technically, the pair is in a consolidation phase and is likely to retrace to 152.20 in the short term. However, the medium-term outlook remains bullish, with a potential target of 155.70 if it successfully breaks above the current range.

At 19:33 Beijing time, the USD/JPY exchange rate was 153.062/075, up 0.01%.