Japanese Yen Outlook: USD/JPY resumes its upward trend, next target 158?
2025-11-25 00:31:09
On Monday (November 24), during the US session, USD/JPY maintained its short-term upward trend, with the price rising steadily from the opening price of 156.341, reaching a high of nearly 157.185, before falling back to 156.785.
Japan’s massive and ever-expanding sovereign debt, coupled with its loose monetary policy, has raised concerns in the market about its long-term fiscal situation.
Unless the recent bullish trendline is broken, traders are likely to continue buying USD/JPY on dips, potentially pushing the pair up to the 158.00 level.
Japanese markets were closed today for the Labor Thanksgiving holiday, but this did not stop the yen sell-off. Year-to-date, the yen has been almost flat against the dollar—a performance that doesn't sound too bad, but it's worth noting that these two currencies are among the worst-performing major currencies in 2025, with declines exceeding 11% against both the euro and the Swiss franc.
From a fundamental perspective, Japan's continued loose monetary policy (i.e., low interest rate policy), coupled with a massive fiscal stimulus plan (the $135 billion spending package announced by new Prime Minister Sanae Takaichi), is exacerbating market concerns about its massive sovereign debt. This problem, which has plagued Japan for decades, has not only failed to improve but has become increasingly severe. Even the decline in US Treasury yields last Friday and the renewed speculation in the market about a December rate cut by the Federal Reserve only provided a one-day respite for the continued rise of the USD/JPY.
The US market will be on holiday for the latter half of this week, and market focus will shift to Japanese economic data across the Pacific. Traders will be watching the latest Tokyo Consumer Price Index (CPI), employment figures, industrial production, and retail sales data. Given market concerns about Japan's long-term fiscal situation, even strong economic data from Japan may not be enough to provide sustained support for the yen.
Technical Analysis
(USD/JPY daily chart source: EasyForex)
From a technical perspective, USD/JPY remains above its 8-week accelerating bullish trendline. As long as this trend continues, the path of least resistance for the pair remains upward. Last Friday's pullback eased the short-term overbought signal from the 14-day Relative Strength Index (RSI), laying the foundation for further gains. Chart-wise, the next key resistance level for the bulls will be the 16-month high above 158.00 – a level that also represents a significant increase in the risk of direct intervention by the Japanese Ministry of Finance.
Unless the recent bullish trendline is broken, traders are likely to continue buying USD/JPY on dips as Japanese policymakers' room for maneuver continues to narrow.
Japan’s massive and ever-expanding sovereign debt, coupled with its loose monetary policy, has raised concerns in the market about its long-term fiscal situation.
Unless the recent bullish trendline is broken, traders are likely to continue buying USD/JPY on dips, potentially pushing the pair up to the 158.00 level.
Japanese markets were closed today for the Labor Thanksgiving holiday, but this did not stop the yen sell-off. Year-to-date, the yen has been almost flat against the dollar—a performance that doesn't sound too bad, but it's worth noting that these two currencies are among the worst-performing major currencies in 2025, with declines exceeding 11% against both the euro and the Swiss franc.
From a fundamental perspective, Japan's continued loose monetary policy (i.e., low interest rate policy), coupled with a massive fiscal stimulus plan (the $135 billion spending package announced by new Prime Minister Sanae Takaichi), is exacerbating market concerns about its massive sovereign debt. This problem, which has plagued Japan for decades, has not only failed to improve but has become increasingly severe. Even the decline in US Treasury yields last Friday and the renewed speculation in the market about a December rate cut by the Federal Reserve only provided a one-day respite for the continued rise of the USD/JPY.
The US market will be on holiday for the latter half of this week, and market focus will shift to Japanese economic data across the Pacific. Traders will be watching the latest Tokyo Consumer Price Index (CPI), employment figures, industrial production, and retail sales data. Given market concerns about Japan's long-term fiscal situation, even strong economic data from Japan may not be enough to provide sustained support for the yen.
Technical Analysis
(USD/JPY daily chart source: EasyForex)
From a technical perspective, USD/JPY remains above its 8-week accelerating bullish trendline. As long as this trend continues, the path of least resistance for the pair remains upward. Last Friday's pullback eased the short-term overbought signal from the 14-day Relative Strength Index (RSI), laying the foundation for further gains. Chart-wise, the next key resistance level for the bulls will be the 16-month high above 158.00 – a level that also represents a significant increase in the risk of direct intervention by the Japanese Ministry of Finance.
Unless the recent bullish trendline is broken, traders are likely to continue buying USD/JPY on dips as Japanese policymakers' room for maneuver continues to narrow.
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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.
