The U.S. dollar held around 159.31 against the yen on Thursday, consolidating within a narrow band as traders weighed incoming signals on Bank of Japan policy.
Markets have sharply increased expectations for a September rate hike, with interest-rate derivatives now implying roughly an 87% probability of a 25-basis-point increase, up from about 23% before the July meeting. The shift follows hawkish commentary from former BoJ board member Seiji Adachi, who suggested the central bank could raise rates as early as next month and again in January, warning that inaction risks reigniting yen weakness and imported inflation.
Attention is now centered on a speech by BoJ Deputy Governor Ryozo Himino, due later on Thursday, where investors will seek clarity on the timing of the next policy adjustment. Governor Kazuo Ueda will not attend the Federal Reserve’s Jackson Hole Economic Symposium due to scheduling conflicts, removing a potential source of direct guidance from the central bank’s leadership at the event.
Technical levels are also in focus. On the four-hour chart, USD/JPY is consolidating near the 158.88 mark, with the pair contained between 158.40 and 159.48. An upside break above 159.48 could open the path toward 161.20, while a downside break below 158.40 would expose the 158.58 support level. The MACD indicator remains above zero and trending upward, aligning with the constructive short-term outlook.
On the hourly chart, the pair rebounded from 158.88 to 159.48 before pulling back slightly toward 158.88. A move above 159.60 could reinforce the upward momentum, with the Stochastic oscillator signaling continued upside bias as its signal line approaches the 80 level.
The near-term direction for USD/JPY will hinge on BoJ signals and U.S. economic data, with the risk of currency intervention remaining a key wildcard for traders.
