Published: 21 November 2025,06:26
Daily Market Analysis New
*USD/JPY surged to 157.90, extending the Yen’s bearish trend as Japan’s ultra-loose monetary stance continues to diverge from global tightening.
*Intervention risk has risen sharply, with Finance Minister Suzuki issuing explicit warnings against “excessively volatile and speculative moves”.
*Fiscal pressures add complexity, as Prime Minister Takaichi’s large stimulus package—combining tax cuts and expanded spending—raises concerns over fiscal discipline and threatens to offset potential BoJ normalization.
The Japanese Yen has extended its weakening trajectory, with USD/JPY advancing to 157.90—its highest level since January—while depreciating against most G7 counterparts. This persistent weakness reflects ongoing divergence between Japan’s accommodative monetary policy and more restrictive stances elsewhere.
However, Friday’s domestic CPI reading of 3% provided some counterbalance, offering the Bank of Japan continued justification for potential policy normalization. This data point helped temper the Yen’s decline temporarily by reinforcing the narrative for eventual rate hikes.
The currency’s downward momentum is now testing the resolve of Japanese authorities. Finance Minister Shunichi Suzuki has escalated verbal intervention, specifically warning against “excessively volatile and speculative moves”—language that historically precedes actual market operations. With USD/JPY trading well above the 155.00 level that previously triggered intervention, the risk of official action is mounting.
Complicating the policy landscape, Prime Minister Sanae Takaichi’s proposed stimulus package—the largest since the pandemic era—threatens to undermine fiscal discipline through combined tax cuts and increased spending. This expansionary fiscal approach risks counteracting monetary normalization efforts and could further pressure the Yen if markets perceive diminished commitment to fiscal sustainability. The currency remains caught between supportive monetary fundamentals and concerning fiscal developments, with intervention risk creating additional near-term uncertainty.
The USDJPY pair maintains a constructive technical framework, characterized by a consistent pattern of higher highs and higher lows that confirms the underlying bullish trend remains intact. The pair is currently undergoing consolidation beneath the significant resistance level at 157.95, a development that represents a healthy pause following its sustained advance.
While the broader bias remains bullish, a breach below the near-term support at 157.15 would signal a potential technical correction, potentially opening a move toward the next support zone near 156.50.
Momentum indicators continue to reflect solid bullish underpinnings. The Relative Strength Index (RSI) remains elevated in overbought territory, indicating sustained buying pressure, while the Moving Average Convergence Divergence (MACD) continues its ascent, confirming positive momentum remains in place. The current consolidation suggests the pair is building energy for its next directional move—a decisive break above 157.95 would signal continuation of the uptrend, while failure to overcome this barrier could prolong the current ranging phase.
Resistance Levels: 161.70, 165.78
Support Levels: 154.00, 150.80
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