Breaking: USD/JPY Breaks Through 1 Year Highs

Early on this Tuesday morning at 04:00 AM UTC, USD/JPY broke through a high that was set on the 10th of January 2025, this is the first time since then that the high has even been tested.

The Yen has been weak throughout 2025 and its weakness continues into 2026. Japan has a very loose monetary policy and for now it has been kept around zero, while US yields have been kept higher, attracting more foreign investors. This has been a common trend around major pairs where the US just seems to always have the better yield. Even in times like the tariffs of 2025, investors still favored USD over other major currencies. Not only is the yield lower, but the gap between the two currencies yields is pretty big and that just adds to the Yen weakness, making USD even more attractive for investors.

On the same note, there is some uncertainty from the Bank of Japan on what their next steps will be, and mixed data helped reduce demand for the Japanese Yen.

On the technical side, the break that set off this huge move from USD/JPY happened on the 9th, where the price broke above an important resistance level at 157.299. After that break above, the bulls were fully in control, and since then we have been rallying very strongly up until today, where we set yearly highs!

I do believe we will continue this move even further, as there are even higher highs that sit very close to where we are right now. A high that was last seen on the third of July 2024 sits roughly 1.8% away from where we are at 161.951.

Keep in mind that this move will only happen if these bulls stay in control. There are some levels you must consider as a precaution; if these levels break, then the likelihood of a bullish continuation is low.

The most immediate level would be 157.895; this marks a recent low on the hourly time frame. If this level gets broken, then the first higher time frame indication of a reversal has occurred, and bears will very likely step in from there. Another level would be the 4H time frame, low at 156.115; this level is significantly more important as many shorter-term traders use the 4H time frame as their confirmation for a trend. This means if the 4H low gets broken, a lot of traders will consider USD/JPY as bearish.