{"id":2692,"date":"2025-12-02T09:45:47","date_gmt":"2025-12-02T09:45:47","guid":{"rendered":"https:\/\/www.finznest.com\/blog\/usd-jpy-sellers-eye-deeper-pullback-after-policy-cycle-divergence-signals\/"},"modified":"2025-12-02T09:45:47","modified_gmt":"2025-12-02T09:45:47","slug":"usd-jpy-sellers-eye-deeper-pullback-after-policy-cycle-divergence-signals","status":"publish","type":"post","link":"https:\/\/www.finznest.com\/blog\/usd-jpy-sellers-eye-deeper-pullback-after-policy-cycle-divergence-signals\/","title":{"rendered":"USD\/JPY Sellers Eye Deeper Pullback After Policy Cycle Divergence Signals"},"content":{"rendered":"
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The pause in the BOJ\u2019s rate hikes, combined with the slowing its rate cuts, has supported a multi-month rise in the USD\/JPY pair. However, changing macroeconomic conditions suggest a potential shift: the Fed may announce cuts while the BOJ could resume hikes, which could reverse the medium-term uptrend.<\/p>\n

Markets have largely priced in Japan\u2019s wide-ranging fiscal package, which briefly supported yen sellers. Attention will now focus on the BOJ\u2019s next move, while the Fed is widely expected to deliver a 25 basis point cut.<\/p>\n

Bank of Japan Hints at Hawkish Moves<\/strong><\/h2>\n

The USD\/JPY pair, nearing long-term highs, is likely adding pressure on the BOJ to resume rate hikes, especially since interventions tend to be short-lived. Governor Ueda has signaled that a hike could be considered at the upcoming meeting, a notable shift from previous cautious statements. Markets now assign a 60% chance of a hawkish move this month and 90% in January.<\/p>\n

Meanwhile, expectations for a 25 basis point Fed cut before year-end are rising, now at just over 85%, up from 81.7% a week ago.<\/p>\n

<\/p>\n

This setup suggests that USD\/JPY sellers could push for a deeper correction. The next key meetings are the Fed on December 10 and the BOJ on December 19.<\/p>\n

Bank of Japan Makes Case for Raising Rates<\/strong><\/h2>\n

From a macroeconomic perspective, the BOJ has a case for raising interest rates, particularly since has stayed above the 2% target for over three years.<\/p>\n

\"Japan<\/p>\n

If markets expect a December rate hike that does not materialize, the opposite effect could occur, allowing USD\/JPY to continue rising, potentially toward 160 yen per dollar. This upward move could be stronger if the Fed also remains passive, though that scenario is currently considered less likely.<\/p>\n

Critical Zone Emerges for USD\/JPY Price Correction<\/strong><\/h2>\n

USD\/JPY hit a local high around 158 yen per dollar just before this year\u2019s January peaks. The current rebound has reached the 155 yen per dollar demand zone, where the short-term direction of the correction is likely to be decided.<\/p>\n

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\"USD\/JPY\"<\/div>\n

If sellers push lower, the next support levels are 153 and 151 yen per dollar. The main resistance remains the recent high of 159 yen per dollar.<\/p>\n<\/div>\n<\/article>\n

***<\/p>\n

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