The currency pair rises as traders adjust positions before the Bank of Japan’s policy announcement, with technical levels suggesting potential resistance.
The USD/JPY pair extends its recovery, climbing above 160.50 in Asian trading as the US Dollar regains strength and investors reposition ahead of the Bank of Japan’s rate decision. The move follows a late rebound from sub-158.00 levels, the lowest since mid-May, with technical indicators supporting further intraday gains.
Spot prices have breached the 160.00 psychological mark and the 38.2% Fibonacci retracement of the recent pullback from a four-decade high. However, the 14-period RSI near 31 and a negative MACD reading signal lingering downside risks, potentially capping upside momentum.
Resistance is expected near the 50.0% Fibonacci retracement at 160.99, with stronger barriers at 161.69 and 162.69. A break above these levels could target the cycle high at 163.97. Downside support lies at 160.28 and 159.41, with a drop below 158.00 likely to accelerate losses.