The Japanese yen is one of the weakest major currencies, due to aggressive fiscal expansion and a low-rate bias under PM Takaichi. Technical signs, like an "Evening Star" and an overbought RSI, suggest a multi-week pullback risk unless 158.80 is breached.
Chart of the week: USD/JPY
Key takeaways
- The yen is one of the weakest major currencies over the past 30 days, having slid 2.4% against the US dollar as aggressive fiscal expansion and a bias toward lower rates under Prime Minister Takaichi weighed on sentiment.
- USD/JPY has surged toward Japan’s historic FX-intervention zone near 160, prompting verbal warnings from officials and signalling growing discomfort with yen weakness.
- USD/JPY is flashing signs of bullish exhaustion: an “Evening Star” reversal pattern and the most overbought RSI reading in 16 months, raising the risk of a multi-week pullback unless 158.80 is breached.
The Japanese yen is one of the weakest major currencies against the US dollar in its past 30-day rolling performance, as of November 24 2025 (see Fig. 1).
The yen plummeted by 2.4% against the greenback, reinforced by the “Takaichi Trade” as new Japanese Prime Minister Takaichi pushed for the implementation of an aggressive fiscal policy and a tilt towards lower interest rates to drive economic growth in Japan.
Fig. 1: 30-day global FX performance as of 24 Nov 2025 (Source: MacroMicro)
USD/JPY rose towards the prior FX intervention risk level of 160
The rapid weakening of the yen, which shot past the prior 156.00 psychological level per US dollar “easily” on last Wednesday, 26 November, to print an intraday high of 157.89 on Thursday, 20 November, has prompted a sudden FX verbal intervention by Japanese authorities.
On Friday, 21 November, Japan’s finance minister, Katayama, issued a stern warning about the yen’s rapid slide, signalling that FX intervention remains on the table to counter further weakness.
Interestingly, the intraday high of 157.89 reached on the USD/JPY on Thursday, November 20, 2025, coincided closely with the 160 level that Japanese authorities previously intervened in April and July 2024 to sell the US dollar against the JPY.
Let’s now review the latest technical elements on the USD/JPY from a multi-week time horizon.
USD/JPY hit its most overbought level in 16 months
Fig. 2: USD/JPY medium-term trend as of 24 Nov 2025 (Source: TradingView)
The prior 5-day rally seen in the USD/JPY from 153.61 low to 179.89 high has flashed out several potential bullish exhaustion conditions that indicate the heightened risk of a mean-reversion decline in the USD/JPY (see Fig. 2).
First, the past three sessions from 19 to 21 November have formed a daily “Evening Star” pattern in USD/JPY, signalling a potential bearish reversal.
Secondly, the daily RSI momentum indicator of the USD/JPY reached an extreme overbought level of 75.14 on Thursday, 20 November, the highest since July 3 2024’s overbought print of 76.22.
Watch the 158.35/158.80 key medium-term pivotal resistance of the USD/JPY, with the medium-term support zone coming in at 154.40/153.60.
A break below 153.60 may expose the next medium-term support zone at 151.90/151.20 (also the 50-day moving average).
On the other hand, a clearance above 158.80 invalidates the mean reversion decline scenario, leaving the 161.95 key long-term pivotal resistance as a potential retest target.
The information presented is historical information, and past performance is not indicative of future performance.
