Political instability in Japan and the Fed’s policy are shaping USDJPY behaviour, with quotes possibly surging to 147.70. Discover more in our analysis for 16 September 2025.
USDJPY forecast: key trading points
- Japan services PMI: previously at 3.9, currently at 1.4
- US сore Retail Sales Index: previously at 3, projected at 4
- USDJPY forecast for 16 September 2025: 146.60 and 147.70
Fundamental analysis
The forecast for 16 September 2025 takes into account that the USDJPY pair is forming a downward wave and trading around 147.00.
Markets have almost fully priced in a Federal Reserve rate cut at this week’s meeting.
Meanwhile, the Bank of Japan is expected to hold rates steady at 0.50% at its upcoming meeting, but traders await clear signals on the outlook for further monetary tightening.
Political uncertainty in Japan is also weighing on the USDJPY rate, with the resignation of Prime Minister Shigeru Ishiba adding to instability.
The election of a new Liberal Democratic Party (LDP) leader could influence the direction of economic and monetary policy, directly affecting yen expectations.
Japan’s services PMI disappointed, coming in at just 1.4 points, down from 3.9 in the previous period.
Meanwhile, the US core Retail Sales Index is forecast to rise slightly to 0.4 points from 0.3. Although modest, this growth, taken together with other US economic indicators, could support the dollar.
Overall, the USDJPY forecast for today looks moderately positive for the USD, with the pair expected to resume its upward trajectory after completing the current correction.
USDJPY technical analysis
On the H4 chart, the USDJPY pair tested the upper Bollinger Band and formed a Shooting Star reversal pattern, now trading near 147.00. At this stage, the pair may extend its corrective wave in line with the pattern signal, with a potential move down towards the support level around 146.60.
At the same time, the USDJPY forecast also considers an alternative scenario, where the price rises towards 147.70 without testing the lower boundary of the channel.
Summary
The USDJPY pair remains close to 147.00, balancing between political uncertainty in Japan and expectations of a Federal Reserve rate cut. The coming days will be decisive: signals from the Bank of Japan and fresh US data could set the next direction. Technical analysis of USDJPY suggests a potential rise towards 147.70 after the correction is complete.
Source: Roboforex