Since Sanae Takaichi’s appointment as Japan’s Prime Minister, USD/JPY, the most volatile of major currency pairs, saw a 5% bullish move coming very close to its 2025 peak. The PM’s fiscal easing projects certainly helped the Japanese stock market, but this came at the cost of the yen. Now, in a pullback, it will be essential to determine whether the current top is local and temporary or more definitive.
The USD/JPY has maintained its reputation as the most volatile FX pair throughout this year, as a 15,000 pip move lower in the first half was met with a similar move coming very close to its 2025 peak.
Since the appointment of PM Sanae Takaichi, the pair has risen by nearly 7%, as traders and participants have rushed to push it higher in a dovish repricing of the Bank of Japan.
Between the firm fiscally-dovish plans from the Prime Minister, Japanese rates (still at 0.50%) that haven’t been raised since January 2025, and massive stimulus plans to boost the economy further, and a general run-higher in the US dollar in the past month-and-a-half trading, fundamentals were not for downside in the pair.
However, the narrative is shifting towards a more balanced approach, with repeated defensive stances from Bank of Japan members and Japan’s Finance Minister Katayama.
Throughout interviews, Katayama repeated that intervention in FX markets is one of the tools to reduce “speculative moves” in the yen, and the country is ready to utilizesuch tools.
The Bank of Japan is known for its several interventions throughout the years, but they haven’t all been as efficient1 as expected.
With inflation also increasing, pushing Japanese yields higher, participants are also adding bets to a rate hike towards the end of the year2.
These narratives contributed to the decline from the end of last week. Still, as Markets await this week’s Tokyo CPI report (Thursday, November 27, 2025), several factors remain pending for a decisive move in the pair.
USD/JPY 8H chart, November 24, 2025. Source: TradingView. Past performance is not indicative of future results.
Resistance levels
- 156.90 to 157.95 Recent top resistance
- 2025 Highs and April 2024 peaks 158.80 to 160.00
- 1990 and July 2024 Peak 161.00 to 162.00
- November highs at 157.895
Support levels
- 153.00 to 154.00 Key pivot
- 150.00 Psychological support
- 146.00 August range support
- 2025 142.00 Main daily support
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