USDJPY Analysis

Introduction

The USD/JPY is one of the most traded pairs and is influenced by US interest rates, Japanese economic performance, and geopolitical risks in East Asia. The Japanese Yen is often viewed as a safe-haven currency, and the USD/JPY may appreciate in times of global risk appetite or vice versa. The price of the pair is impacted by Japan’s export market, including technology and automobiles. The USD/JPY tends to have an inverse correlation with gold, as investors flock to safe-haven assets.

Fundamentals and Interest Rates

The Federal Reserve policy is Dovish with the (FED) current Interest rate 3.75%. Latest change was Dec 10, 2025 (-25bp)%.
On that side the Bank of Japan policy is Hawkish and (BOJ) has set its interest rate to 0.75% by latest change, Dec 19, 2025 (25bp).
(FED) Higher interest rates generally lead to higher returns on investments denominated in USD. This tends to attract foreign capital into USD assets.

Based on the economic and macro fundamental data, The Fundamental Bias of USD is Strong Bullish and for the JPY is Weak Bullish.
Ziwox considering Weak Bullish bias for this asset and we anticipate long-term price increases.
Our Ziwox A, mid-term Fundamental Score for USD is 19. and Fundamental Score for JPY is 5. So, base on the Fundamental Score, we predict mid-term upside price movement.

Market Overview & Performance

In the current trading session, "Sydney", Market risk sentiment is Strong Risk-OFF. The United States Dollar and Canadian Dollar recorded the strongest performance, while the Gold and New Zealand Dollar are weakest so far.

Currencies performance vs US dollar "USD"
Gold "XAU", recorded a -2.35% decrease against us dollar.
Euro "EUR", performance has been -0.28% down so far
Pond "GBP", performance has been -0.47% down as of now
Australian dollar "AUD", has dropped by -0.93%
New Zealand dollar "NZD", has dropped by -1.09%
Japanese YEN "JPY", experienced -0.23% fall
Swiss franc "CHF", experienced -0.31% fall so far
Canadian dollar "CAD", has lost -0.16%
Market risk sentiment is OFF, Investors seek safety, favoring safe-haven currencies and assets while selling off riskier investments.

Market Sentiment and Positioning

USD COT (Commitments of Traders):

Institutions Net Position on >U.S. Dollar Index is 3187 included 18912 long, 15725 short and 2494 position changed from last week.
So they mainly have a bullish view on this asset and bought USD for higher prices in long-term.
Last week 2494 repositioning Indicates that they are optimistic about higher prices in mid-term.

JPY COT (Commitments of Traders):

Institutions Net Position on >Japanese Yen is -75102 included 100155 long, 175257 short and -13364 position changed from last week.
So they mainly have a bearish view on this asset and sold JPY for lower prices in long-term.
Last week -13364 repositioning Indicates more sell positions and price pressure in short-term.

Retail Traders:

Crowd traders or Retail traders are bullish on the USDJPY with 39% 61% ratio. 0 long pos and 0 short position.
We generally adopt a contrarian approach towards crowd sentiment and we give probability USDJPY prices may continue to rise.

Technical Levels and Support/Resistance

The USDJPY pair is approaching a critical technical support level near 153.124.
Technical trend is BUY, If the pair continues to weaken, this support could become a good area to enter a long positions.
On the upside, there is key resistance near 153.347. Technically, A break above this resistance could signal a shift in momentum, but need to get a confirmation in this area due to the reversal or correction potential.