USD/JPY extended a late rebound from the mid-155.00s and rose during Friday’s Asian session. It reached about 157.55, but buying interest stayed limited after the bounce.
The yen weakened after softer Tokyo consumer inflation data, which may allow the Bank of Japan to pause amid economic concerns linked to Middle East tensions. A modest rise in the US dollar also supported the pair.
Intervention Risk Stays In Focus
Japan’s top foreign exchange diplomat, Atsushi Mimura, said officials are in close contact with the US on currency. This kept intervention risk in focus and limited further yen losses.
On Thursday, USD/JPY dropped from 160.75, the highest level since July 2024, and found support near the 61.8% Fibonacci retracement of the February–April rise. The pair has also held above the 200-day EMA.
Momentum signals still point lower, with RSI near 40 and MACD below zero. Resistance is seen at 157.48, then 158.73 and 160.75.
Support sits at 156.47, then 155.47 and the 200-day EMA at 155.21. Below that, levels include 154.03 and 152.20.
Outlook From May 1 2026
The technical section was produced with help from an AI tool.
As of today, May 1, 2026, we are seeing the USD/JPY hold above the 157.00 level, but the path forward is clouded by conflicting forces. The fundamental weakness in the Yen is running directly into strong verbal warnings from Japanese officials, creating a tense standoff. This suggests that instead of betting on direction, traders should prepare for a sharp, sudden move.
The case for a weaker Yen remains intact, as the latest Tokyo Core CPI data for April 2026 came in at 1.9%, just below the Bank of Japan’s target. This gives the BoJ every reason to delay further interest rate hikes, keeping its policy accommodative. This policy could push the pair to test resistance levels from last year, such as the 158.73 mark.
However, the risk of government intervention is extremely high and should not be underestimated. We remember the significant yen-buying operations in October 2024 and again in March 2025, which occurred as the pair moved past 161. Finance Minister Suzuki’s comments just two days ago that he is watching markets with a “high sense of urgency” make the threat of a repeat intervention very credible, effectively capping the upside near the old 160.75 high.
On the other side of the pair, the US dollar remains supported by a Federal Reserve concerned about persistent inflation, with the latest Core PCE Price Index holding stubbornly at 2.9%. This policy divergence between a hawkish Fed and a dovish BoJ provides a strong floor under the pair. This prevents a currency collapse unless the Ministry of Finance decides to act forcefully.
Given this backdrop, implied volatility is the main factor to watch, with one-month options pricing now reflecting a potential for explosive movement. Strategies like buying straddles or strangles could be effective, as they profit from a large price swing in either direction, whether from a breakout or a surprise intervention. A clean break below the critical 155.20-155.50 support zone would be the signal that intervention is underway and that the short-term trend has reversed.
