18.10.202417:05 Forex Analysis & Reviews: USD/JPY. Analysis and Forecast

Today, amid comments from Japanese government authorities, the Japanese yen is attempting to attract some buyers.

These comments have fueled speculation about possible government intervention. Expectations that stronger domestic inflation could give the Bank of Japan room to raise interest rates are also supporting the yen. Additionally, a modest pullback in the U.S. dollar puts some downward pressure on the USD/JPY pair.

However, there are growing hopes that the Bank of Japan will refrain from raising rates this year, given the uncertainty surrounding the new political leadership's stance on monetary policy. This could limit the yen's strength, providing support for the pair ahead of the general elections scheduled for October 27th.

From a technical perspective, a breakout above the psychological level of 150.00 or the upper boundary of the three-day range can be seen as a new trigger for the bulls. Moreover, oscillators on the daily chart remain comfortably in positive territory and are far from the overbought zone, indicating that the most probable direction for the USD/JPY pair is upward.

Therefore, any decline can be considered an opportunity for buying, with solid support near the 149.20 level. Support is next expected at the round level of 149.00, below which the USD/JPY pair could accelerate its corrective decline towards the 148.60 level on its way to the 148.00 round level and last week's swing low in the 147.35 level, which would serve as a critical pivot point. A break below this level could turn market sentiment more bearish.

On the other hand, momentum above the previous session's high around the 150.30 level could extend further to the August high around 150.80. Further buying interest beyond the 151.00 round level would reinforce a positive outlook, paving the way for further growth to the 152.00 level in the short term.