USD/JPY Market Analysis: Fed and BOJ Decisions in Focus
BY Eleni Antoniou
|September 16, 2026USD/JPY is trading near 155.00 on 16 September after a significant decline from the 160.00 area at the beginning of the month. The short term is dominated by policy risk, as the Federal Reserve concludes its interest rate decision today. Meanwhile, the Bank of Japan meets on the 18 September to announce theirs. The markets are widely expecting a 25 basis point rate hike from both central banks.
Market Overview for USD/JPY
The dollar-yen pair fell from an early-September peak around 160.00 to a low near 152.85 on 8 September, before recovering toward the 155.00 area today. That sequence leaves the short-term structure mixed, the sharp decline still defines the wider September move, but the recovery has been mild so far testing the 154.00 pivot. With two policy decisions close together this week, follow-through above or below the nearby range of 152.00 to 155.00 may matter more than a single headline-driven spike.
USD/JPY Latest Market News
US inflation data released on 11 September showed CPI rising 0.4% month-on-month in August and 3.4% year-on-year. That backdrop has kept attention on whether the Federal Reserve will maintain a restrictive message. However, markets are widely expecting a 25 basis point rake hike today.
In Japan, the Bank of Japan left its policy rate at 1.0% at the 30-31 July meeting. Its published July Summary of Opinions noted that higher crude-oil prices could weigh on activity while Japan was still expected to grow moderately.
Japan reported a fourth consecutive monthly trade deficit for August, with higher oil import costs a key factor. The release adds a near-term macro headwind for the external balance, while its FX impact remains secondary to the policy outlook and global risk appetite.
The BOJ's next scheduled Monetary Policy Meeting is on 18 September, and markets are widely expecting a 25 basis point rake hike.
USD/JPY Technical Analysis
Daily price action shows a fast repricing lower from 160.00 on 2 September to 152.85 on 8 September. The subsequent bounce has brought USD/JPY back around the 155.00 pivot, that seems to be capped the first recovery attempt at the time of writing. In practical terms, 155.00 is the near-term pivot level, a sustained move above this area could improve the short term recovery, whereas a successful retest and continuation lower could refocus attention on 152.00.
Price is below the 50-day moving average, and the the 14-day Relative Strength Index (RSI) is printing a converging pattern with price.
Bullish Scenario: USD/JPY
A bullish USD/JPY scenario may gain support if the Federal Reserve delivers a more restrictive-than-expected message, US yields rise, and the BOJ either holds policy steady or signals a gradual pace of further tightening.
Bearish Scenario: USD/JPY
A bearish USD/JPY scenario may gain support if the Fed disappoints hawkish expectations, US yields fall, or the BOJ delivers firmer guidance on additional tightening. Risk aversion could reinforce yen demand.
Key levels and catalysts
- Support: 152, then 148
- Resistance: 155, then 160
Catalysts
- 16 September: Fed interest rate decision
- 18 September: BoJ interest rate decision
- US yield moves, oil prices, and risk sentiment: secondary drivers that can amplify the policy reaction.
Conclusion
USD/JPY does not have a clean directional bias at the moment. The 152 to 155 support and resistance areas are the key technical price levels to watch. The Fed and BOJ interest rate decisions this week can change the expected US-Japan interest rate differential and the short term trajectory of the currency pair.
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Authors BIO
Eleni is a financial markets enthusiast contributing to content covering forex, indices, commodities, and global market developments. She is passionate about researching market-related topics and helping make financial information more accessible to traders.
