The US Dollar faced resistance at 152.35 against the Japanese Yen after rebounding from 151.10. On Monday, the Dollar increased against the Yen but couldn’t break through the resistance level of 152.35 during European trading. Political uncertainty in Japan is weakening the Yen. The Komeito party left the coalition with the LDP due to differences with leader Sanae Takaichi. The 4-hour chart indicates a decrease in bullish momentum, even though the RSI remains above 50. If the Dollar fails to move above 152.35, it may retest lows around 151.70.

Market Targets and Forecasts

If the US Dollar declines, bears may aim for the low of 151.10 from the previous Friday, or the October 7 low near 150.30. On the other hand, if it exceeds 152.35, it could reach the October 9 highs above 153.20. Further increases might target the 127.2 Fibonacci retracement level at 183.85. The Japanese Yen’s performance varied against other major currencies. It was strongest against the New Zealand Dollar, while changes included a 0.22% rise in USD, a 0.14% increase in GBP, and a 0.18% drop in CAD. This data highlights the Yen’s standing amid current currency trends. As of October 13, 2025, we are monitoring the USD/JPY pair closely as it tests the important 152.35 resistance level. If it fails to break through, it may indicate that the recent upward trend is losing strength. Recent data from the U.S. Commodity Futures Trading Commission shows that, although large speculators have reduced their significant short positions on the Yen, a bearish sentiment still prevails.

Impact of Central Bank Policies

The Yen’s weakness stems from political instability in Japan, mainly due to the Komeito party leaving the ruling LDP coalition. This uncertainty makes it unlikely that the Bank of Japan will change its ultra-loose monetary policy soon. This situation contrasts sharply with other central banks and keeps pressure on the Yen. If 152.35 continues to act as resistance, traders should brace for a potential decline toward the 151.10 support level in the short term. A drop below that point could lead to a deeper correction toward 150.30, offering opportunities for those with put options. The slowing momentum noted on shorter-term charts supports the possibility of this downward shift. On the other hand, if the Dollar manages to break and hold above 152.35, it would indicate that the bullish trend is resuming, aiming for recent highs just above 153.20. Traders might consider buying call options to take advantage of such a move, spurred by the overall strength of the US Dollar amid ongoing global trade tensions. The market dynamics are further complicated by safe-haven demand, propelling gold prices to new highs exceeding $4,100. Unlike the frequent verbal warnings from Japan’s Ministry of Finance we saw in 2024, officials have been quiet, likely focused on the domestic political crisis. This absence of immediate intervention threats may encourage Dollar bulls to push for higher levels. Supporting the Dollar’s strength, last week’s US core inflation figures were slightly higher than expected at 3.2% year-over-year, reducing prospects of a Federal Reserve rate cut before the year’s end. This growing policy divergence between a hawkish Fed and a struggling Bank of Japan is a significant factor driving this currency pair. This fundamental imbalance suggests that any dips in the USD/JPY will likely be viewed as buying opportunities. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now