The USD/JPY is predicted to stay between 157.60 and 158.60, according to analysts from UOB Group. This indicates that the USD is currently stabilizing within a range of 157.10 to 159.10. In the last 24 hours, the USD moved between 157.46 and 158.60, finishing at 158.15. Today’s expected trading range continues to be between 157.60 and 158.60.

USDJPY Consolidation Phase

Recently, the USD peaked at 159.45 but has since dropped significantly. The near-term forecast remains at a trading range of 157.10 to 159.10. This analysis comes from the FXStreet Insights Team, known for gathering market insights from leading experts. This includes comments from commercial entities as well as both internal and external analysts. Looking back to mid-2024, the pair was also expected to trade tightly within the 157.10 to 159.10 range. During this low-volatility period, the market was waiting for a major catalyst after a sharp decline. This sideways movement offered specific trading opportunities.

Interest Rate Differential Impact

The main driver at that time was a significant interest rate difference. The Federal Reserve maintained a 5.50% rate throughout much of 2024, while the Bank of Japan was just starting to move away from negative rates of 0.1%. This large gap favored the dollar, but the risk of Japanese currency intervention limited further gains. This was evident when the Ministry of Finance intervened with a record 9.79 trillion yen in April and May of 2024. Now, the situation has completely changed. The Federal Reserve’s policy rate has dropped to 3.75% after several cuts in 2025, while the Bank of Japan has gradually increased its rate to 0.50%. This shrinkage of the rate gap has changed the dynamics of the pair, breaking it out of the previous consolidation phase. The market is no longer constrained by the same opposing factors. In light of this shift, traders should adjust their strategies. Instead of relying on the low volatility strategies that worked around the 158.00 level, such as selling strangles, they should consider buying options to capture potentially larger price movements in the coming weeks, as central bank policies have become more active and aligned. Create your live VT Markets account and start trading now.

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