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    USDJPY Breaks Below 154 as Yen Rally Accelerates

    8th September

    • Takeaways
    • Analysis
    • FAQs

    Key takeaways

    1. USDJPY broke below 154 - the yen's strongest level since February, a seven-month high.

    2. Markets now price an 83% chance of a BOJ hike on September 17, with more tightening expected by January.

    3. Japanese wages just grew at their fastest pace since 1997 - the strongest case yet for tighter BOJ policy.

    Lukman Otunuga

    Lukman Otunuga

    Head of Market Research

    Meet the analyst

    USDJPY fell to around 154 on Tuesday, pushing the yen to its strongest level since February.

    The move was driven by carry-trade unwinding and growing expectations of capital repatriation by Japanese investors.

    Markets are now pricing an 83% probability of a BOJ rate hike at the September 17 meeting, with additional tightening expected by January 2027.

    • Japanese nominal wages rose 4.7% in July - the fastest pace since January 1997 - comfortably beating forecasts of 3.8% and reinforcing the case for tighter BOJ policy.

    • Japan's Q2 GDP was revised up to an annualised 1.4%, from an initial 1.1%, though it still fell short of the 1.6-1.8% consensus range.

    • Separately, Japan's foreign currency reserves plunged by a record $79.6 billion in August, underscoring the scale of recent intervention to defend the yen.

    The message is simple: the yen is no longer weakening on autopilot, and the market is pricing in a genuinely more hawkish BOJ than it was even a few weeks ago.

    WHAT'S NEXT

    The focus now shifts to whether BOJ rate-hike expectations continue to build ahead of the September 17 decision. If hike bets strengthen further, USDJPY may stay under pressure. Any pushback from policymakers, signs of fresh intervention, or a broader dollar rebound could trigger a short-term recovery.

    USDJPY

    What could move the asset: BOJ rate-hike expectations, yen repatriation flows, and broader dollar sentiment.

    Bullish Factors

    • A rebound in the US dollar

    • BOJ caution on the pace of further hikes

    • A hold above key support near 152.50-153.00

    Bearish Factors

    • Strengthening BOJ hike expectations

    • Continued yen-buying flows and repatriation

    • A break below current support levels

    Technical Overview

    USDJPY remains in a clearly bearish structure on the daily chart, having broken through several layers of prior support on its way to current levels near 154. Momentum indicators remain weak, with RSI showing oversold conditions on shorter timeframes and MACD still negative. A sustained move lower opens the door toward the 152.50-153.00 zone, last defended in early September. Any recovery attempt is likely to face resistance in the 155.25-158.00 region.

    Frequently asked questions

    A hawkish wave of Japanese data - wages, GDP, hike odds - is colliding with fading certainty around further US tightening.

    A dollar rebound, BOJ caution on the pace of hikes, or signs of fresh currency intervention.

    Support near 152.50-153.00. A break lower extends the slide; resistance sits near 155.25-158.00 on any bounce.

    ForexUSDINDUSDMarkets

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