Last Updated on 30/09/2026
- USD/JPY slips toward 157.00 during early Asian trading on Wednesday.
- Renewed verbal interventions from Japanese authorities provide support for the Yen.
- Hawkish comments from Federal Reserve officials could limit further declines in the pair.
Fundamental Analysis
The USD/JPY pair trades near 157.00 in early Asian trading on Wednesday, as the Japanese Yen strengthens amid renewed concerns over possible currency intervention. The move follows comments from US Treasury Secretary Scott Bessent and Japan’s Finance Minister Satsuki Katayama, who reiterated plans to deepen cooperation over Yen weakness and maintain orderly foreign exchange markets.
Katayama said Tuesday that she considers the Yen’s current valuation problematic and confirmed that Japan will remain in close contact with the US Treasury. Japanese officials have recently stepped up their warnings about excessive currency depreciation, with top FX diplomat Atsushi Mimura urging markets to take Tokyo and Washington’s concerns seriously.
The Yen advanced despite weak Japanese economic data. Industrial production declined 2.2% year-on-year in August, compared with a 4.0% increase previously.
Meanwhile, hawkish signals from Federal Reserve officials could limit USD/JPY’s downside. Fed Governor Michael Barr warned that additional rate increases may be necessary to contain inflation, while Cleveland Fed President Beth Hammack previously said inflation risks remain elevated and monetary policy should stay restrictive.
Markets are now awaiting the US ADP employment report and Personal Consumption Expenditures (PCE) Price Index later Wednesday. According to the CME FedWatch Tool, markets currently price a 47.1% probability of a Fed rate hike in October and a 92.5% probability of another increase in December.
Yen Strengthens as Japanese Officials Renew FX Warnings
Scotiabank analysts identified the Japanese Yen as a notable exception to broader defensive trading across G10 currencies. They attributed the Yen’s recent strength partly to renewed comments from Atsushi Mimura, who reiterated warnings previously issued by Prime Minister Sanae Takaichi and Finance Minister Satsuki Katayama. The comments have provided additional support for the Yen and helped it outperform several other major currencies.
Hawkish Fed Signals Provide Support for the Dollar
Fed official Goolsbee also adopted a hawkish tone, highlighting the potential risks of an economic overheating driven by expectations of future AI-related productivity gains. He also pointed to large fiscal deficits and emphasized the importance of seeing clear evidence that inflation is moving sustainably lower.
These comments suggest that policymakers remain focused on inflation risks and may have limited tolerance for easing monetary policy too quickly. The FXS Fed Sentiment Index increased by 1.01 points to 145.30, remaining firmly above the neutral 100 level and indicating a relatively hawkish interpretation of recent Fed commentary.
Technical Analysis: USD/JPY Maintains a Bearish Bias Below the 100-Day SMA
On the daily chart, USD/JPY maintains a mildly bearish near-term tone while trading below both the 100-day simple moving average (SMA) and the upper Bollinger Band. The 14-day Relative Strength Index (RSI) stands around 48.8, indicating relatively neutral momentum following the recent decline.
On the upside, resistance is located around the upper Bollinger Band at 159.20, followed by the 100-day SMA near 159.55. On the downside, initial support lies around the Bollinger middle band at 156.10, while stronger support is found near the lower Bollinger Band at 152.95.
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