USD/JPY (JPY=X) Forecast

USD/JPY is trading at 157.166, having recovered from a significant sell-off (153.48 low on 2026-09-08) with a rebound of ~3.7% over the past two weeks. The currency pair shows mixed technical signals: (1) Positive: Strong recovery momentum from early September lows, trading near upper range of recent consolidation, and 9-day uptrend intact. (2) Negative: Still ~1.3% below August highs (160.19), indicating resistance; volatility suggests directional uncertainty; and no clear breakout confirmation above 158.30 resistance. The pair is consolidating between 153.48 and 160.19, currently at the midpoint. Macroeconomic factors (BOJ policy divergence, US rate differentials, risk sentiment) remain critical drivers but are opaque from price action alone. Recommend waiting for either a decisive break above 158.50 (bullish signal) or a close below 156.00 (bearish signal) before taking directional positions. Current price offers neither compelling entry point.