USDJPY forms a corrective wave: the market awaits determination from the BoJ
Amid economic data from Japan, the USDJPY rate may form a downward wave towards the 149.30 area before resuming growth. Find out more in our analysis for 26 September 2025.
USDJPY forecast: key trading points
- Japan’s core inflation remained steady at 2.5%
- The BoJ keeps the key interest rate at 0.5%
- The BoJ has begun selling off part of its ETF and REIT portfolio
- USDJPY forecast for 26 September 2025: 149.30 and 150.50
Fundamental analysis
The forecast for 26 September 2025 takes into account that the USDJPY pair is forming a corrective wave and is trading around the 149.70 mark.
In September, core inflation in Japan’s capital remained at 2.5%, above the BoJ’s target level of 2.0%. This fact reinforces expectations that if domestic indicators continue to exert pressure, the BoJ will be ready to take more decisive steps towards tightening monetary policy.
The US dollar continues to strengthen against most global currencies, including the yen, prompting markets to adjust expectations for Federal Reserve rate cuts.
Markets are starting to reassess the likelihood of sharp and aggressive rate cuts before year-end: the probability ratios for such steps have declined.
The Bank of Japan is still holding its key rate unchanged at 0.50%. Today’s USDJPY analysis also factors in that the BoJ has begun selling off part of its ETF and REIT portfolio, which may signal a gradual normalisation of the USDJPY trajectory.
Despite political instability in Japan, there is hope that the new leadership will cooperate with the BoJ, which could positively influence the JPY.
USDJPY technical analysis
On the H4 chart, the USDJPY pair tested the upper Bollinger Band and formed a Shooting Star reversal pattern while trading around 149.70. At this stage, it may continue its corrective wave following the signal from the pattern. The USDJPY rate broke above the upper boundary of the ascending channel, suggesting that there are solid chances for a pullback to the broken level near 149.30.
At the same time, the USDJPY forecast also considers another possible scenario, where the price rises towards 150.50 without testing the support level.
Summary
Japan’s economic instability is making its mark; against this backdrop, USDJPY technical analysis suggests a correction towards the 149.30 support level before resuming growth.