USD/JPY Price Hits a Multi-Month High – Key Levels to watch

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The Federal Reserve concluded its latest meeting with a decision to keep interest rates unchanged at 4.5%. The decision was not unanimous, as some Federal Open Market Committee members voted in favor of a 25-point cut. This move came despite repeated calls from U.S. President Donald Trump for a rate reduction.

With this stance, the Fed reaffirmed that its monetary policy decisions remain guided by key economic indicators (namely inflation data, labor market conditions, and overall economic performance).

In his post-meeting press conference, Fed Chair Jerome Powell struck a slightly hawkish tone, emphasizing that the Committee opted to keep interest rates unchanged rather than raise them (even as markets were anticipating a potential rate cut). This stance led investors to scale back expectations for a September rate cut, choosing instead to await key economic data from July and August before reassessing their outlook. As a result, the U.S. dollar strengthened against major currencies.

Bank of Japan Maintains Cautious Approach

The Bank of Japan also kept its policy rate unchanged at 0.5%, opting to take more time to assess the economic impact of recent U.S. tariffs, particularly considering the reduced uncertainty following a new agreement with the U.S. administration. The BoJ raised its core inflation forecast from 2.3% to 2.8%, signaling rising inflationary pressures and the possibility of future rate hikes to bring inflation back to the 2% target.

USD/JPY – Technical Outlook 

On July 7, the USD/JPY closed above its 50-day moving average and has since started an uptrend, creating higher highs with higher lows. Today, the pair reached its highest level since late March, approaching the key 150.00 psychological threshold.

Currently, the pair appears to be heading towards the high end of the trading price zone located between 149.19 and 151.90. That said, the resistance level of the-March 28 high at 151.20 should be considered.

Downside Scenario

A daily close below 149.19 suggests weakening bullish momentum and potential profit-taking by buyers. This could open the door for bearish activity, possibly driving the pair toward 146.41. Further daily close below that level may encourage bears to send the price even lower towards 142.34. In this case, the support area residing between 144.10 and 143.39 should be kept in focus.

USD/JPY – Daily Price Chart

Chart Source: ADSS Platform