Japanese Yen Price Action Setups: USD/JPY, EUR/JPY, GBP/JPY – October 16, 2025
Original article by James Stanley, courtesy of Forex.com
The Japanese Yen (JPY) continues to face headwinds as major currency pairs such as USD/JPY, EUR/JPY, and GBP/JPY push higher. This prolonged weakness in the Yen can be attributed to divergent central bank policies, persistent inflation dynamics outside Japan, and a notable lack of intervention from the Bank of Japan (BoJ), which has allowed speculators to capitalize on the trend. In this comprehensive analysis, we examine the technical setups and price action trends in USD/JPY, EUR/JPY, and GBP/JPY, with key levels of interest and broader macro themes.
Overview of Japanese Yen Weakness
– The Japanese Yen has depreciated significantly in recent months, particularly against the U.S. Dollar, Euro, and British Pound.
– Key drivers of decline:
– Divergence between Japan’s ultra-loose monetary policy and the relatively hawkish stances by the Federal Reserve, ECB, and Bank of England.
– Persistent yield differentials attracting carry trades against the Yen.
– Minimal intervention from the Bank of Japan, allowing the Yen to slide unimpeded.
– A psychological turning point emerged when USD/JPY surpassed the 150.00 level, bringing back concerns of potential intervention, though none has materialized yet.
USD/JPY Technical Outlook
USD/JPY has been a focal point amid the Yen’s broader weakness. After years of consolidation and intermittent pullbacks, the pair has surged to new multi-decade highs.
Key Technical Levels:
– Resistance: 153.00 and 155.00
– Psychological barriers: 150.00 and 152.00 (already surpassed)
– Support: 149.00, followed by 147.30 (prior swing low)
Chart Observations:
– USD/JPY has firmly broken above the 150.00 level, a point where traders previously feared Japanese government or BoJ intervention.
– The breakout suggests continued demand for USD over JPY amid current macroeconomic fundamentals.
– Momentum remains bullish as the pair maintains its uptrend above key moving averages.
Potential Scenarios:
– Bullish Scenario:
– Sustained close above 152.00 keeps the bullish trend intact.
– Break above 153.00 opens the possibility for a test of 155.00 in the near term.
– Bearish Scenario:
– A move back below 150.00 could trigger technical selling and rekindle discussions of intervention risks.
– Deeper support resides near 147.30, which served as resistance in mid-2023.
Fundamental Backdrop:
– The Federal Reserve remains committed to keeping rates higher for longer, as stated in recent FOMC communications.
– In contrast, the BoJ has only slowly adjusted its yield curve control policy and remains reluctant to tighten.
– Expected changes in US interest rate expectations continue to fuel USD demand.
EUR/JPY Price Action Analysis
The EUR/JPY pair has mirrored broad Yen weakness, reaching levels not seen in over a decade. With the European Central Bank still maintaining relatively tight monetary policy, the Euro has found support against the struggling Japanese currency.
Key Technical Levels:
– Resistance: 160.00, followed by 161.80 (monthly highs)
– Support: 158.00, then 156.30
Chart Observations:
– Since breaking out above 154.00 earlier in the year, EUR/JPY has been climbing in a defined ascending channel.
– RSI is approaching overbought territory, but buyers continue to drive the pair higher, signaling underlying strength in the Euro.
Potential Scenarios:
– Bullish Continuation:
– If EUR/JPY holds above 158.00 support, buyers may push toward the next resistance level of 161.80.
– The trend remains well-supported by both momentum and structure
Explore this further here: USD/JPY trading.