USD/JPY Price Forecast: Stays inside Ascending Triangle formation

The USD/JPY pair gives up its intraday gains and ticks down marginally to near 156.70 during the European trading session on Monday. The pair turns upside down as the Japanese Yen (JPY) outperforms its peers amid growing expectations that the Bank of Japan (BoJ) will continue raising interest rates.

BoJ hawkish expectations are prompted by comments from Governor Kazuo Ueda pointing to hopes increase in wage growth and inflation in the near term. "Wages and prices are highly likely to rise together moderately," Ueda said earlier in the day. He added the central bank is expected to "continue raising interest rates if the economy and prices move in line with our forecast". 

Though investors have underpinned the Japanese Yen (JPY) against the US Dollar (USD), the latter is outperforming its other peers as the United States (US) strike on Venezuela has increased its safe-haven demand.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades 0.15% higher to near 98.60.

In Monday’s session, investors will focus on the US ISM Manufacturing PMI data for December, which will be published at 15:00 GMT.

USD/JPY technical analysis

In the daily chart, USD/JPY trades at 156.74. Price holds above the 20-day EMA at 156.26, which is edging higher and supports a mild bullish bias. RSI at 55.99 remains above the 50 midline, showing steady momentum.

The rising trend line from 154.39 underpins the bullish bias, offering support near 156.56. A daily close below 156.56 would break that base and could trigger a deeper pullback towards the December low of 154.35.

Looking up, the pair could approach the psychological level of 160.00 on a decisive break above the November high of 157.90.

(The technical analysis of this story was written with the help of an AI tool.)