USDJPY – Strap in For the Central Bank Rollercoaster US Dollar vs Japanese YenPEPPERSTONE:USDJPYPepperstoneThe next 4 trading days could be crucially important for FX markets, with traders bracing for the outcomes of a variety of different events including several central bank meetings, economic data readings and trade deal/tariff negotiations. No currency pair within the majors is likely to feel the impact of these events more than USDJPY, given that both the Federal Reserve (Fed) and Band of Japan (BoJ) interest rate decisions take place within a 9-hour window late on Wednesday evening and early Thursday morning, UK time (Fed 1900 BST Wed, BoJ 0400 BST Thurs). The first move in USDJPY at the start of this week has been higher. This was in response to the announcement of a trade deal between the EU/US, which sees tariffs of 15% on most EU goods imported into the US and has been taken as a success for President Trump and his trade team. (general USD positive). When coupled with the political uncertainty surrounding Japanese PM Ishiba, who is fighting to keep his job, (potential JPY negative) USDJPY has traded from opening levels at 147.51 on Monday up to a high of 148.71 earlier this morning in Asia. Looking forward, both the Fed and BoJ are expected to keep interest rates unchanged. This could make what is said at the accompanying press conferences by Fed Chairman Powell (1930 BST Wed) and BoJ Governor Ueda (0730 BST Thurs) on the timing of their next respective interest rate moves potentially pivotal for the direction of USDJPY into the weekend. Tier 1 US economic data may also be important, with the Fed’s preferred inflation gauge (PCE Index) due for release at 1330 BST on Thursday, and the next update on the current health of the US labour market due on Friday at 1330 BST in the form of Non-farm Payrolls. Sentiment may also be impacted on Friday by any headlines or social media posts from President Trump regarding trade deals and updates on whether he may extend or hold certain countries to his current deadline of August 1st. Technical Update: Focus on Fibonacci Retracement Resistance at 149.40 On July 16th 2025, USDJPY traded to a price high of 149.19, nearing what might have been considered a resistance level by traders at 149.40. This level is equal to the 50% Fibonacci retracement of the price weakness seen from 158.88 on January 10th down to 139.88, the April 22nd low. Having been capped by this resistance level, a setback in price developed last week. However, this phase of price weakness encountered buying support around the Bollinger mid-average, currently at 146.98, from which fresh attempts at price strength have emerged. As a result, it might be argued that this type of price action is more constructive in nature, especially as since the April 22nd low was posted a pattern of higher price lows and higher price highs has so far materialised, as the chart above shows. That said, with potential for a sustained period of USDJPY volatility in the week ahead let’s consider what may be the important support and resistance levels that could influence the direction of prices moving forward. Potential Resistance Levels: Having previously capped price strength, the 149.40 retracement level may prove to be successful in doing so again, meaning closing breaks above 149.40 might now be required to suggest a further period of price strength. As the chart above shows, if successful breaks above 149.40 do materialise, potential may then turn towards tests of the next resistance at 151.21, the March 28th session high, even 151.65, the higher 61.8% Fibonacci resistance level. Potential Support Levels: Having seen it offer support to recent price declines, traders may still be focusing on the 146.98 Bollinger mid-average as an important level that if broken on a closing basis, might lead to a further phase of price weakness. Closing breaks under the 146.98 support while not a guarantee of further declines, could suggest potential to test 145.85, the July 24th session low and rally point, even towards 142.68, the July 1st low. The material provided here has not been prepared accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research, we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.