USD/JPY Forecast: September 12, 2026

As we transition from the London session into the New York overlap, the USD/JPY pair is trading near the 153.50 - 154.00 zone, reflecting a significant structural shift. Following a hawkish pivot from the Bank of Japan and recent US PPI data, the pair has aggressively sold off from the 160.00 handle, breaking critical market structure. For traders utilizing Smart Money Concepts (SMC) and ICT methodologies, this volatility presents high-probability setups as the market seeks fresh liquidity pools.

HTF Bias & Market Structure

The Higher Time Frame (HTF) bias has shifted from bullish to decisively bearish. The daily chart reveals a confirmed break of structure (BOS) below the critical 155.20 swing low, which previously acted as a major accumulation zone. This breakdown has completed a macro Head and Shoulders pattern, leaving behind significant Fair Value Gaps (FVGs) and unmitigated bearish order blocks. The current market structure dictates that we look for premium pricing to execute short positions, aligning with the institutional order flow targeting sell-side liquidity (SSL) resting below the 152.00 level.

Key Levels to Watch

Applying ICT principles, we have identified the following institutional reference points:

• 155.20 - 155.50 (Bearish Breaker Block): The previous support zone has now flipped to a high-probability breaker block. This area aligns with a daily FVG, making it a prime zone for institutional short entries.
• 154.78 (Local Resistance): A lower timeframe order block established during the recent aggressive sell-off.
• 152.10 (Sell-Side Liquidity): A major swing low from earlier this year. This is the primary draw on liquidity for the current bearish leg.
• 149.60 (Macro Target): The ultimate HTF objective if the 152.00 liquidity pool is swept and the bearish displacement continues.

Bullish Scenario

While the HTF bias is bearish, a short-term bullish retracement is highly probable given the deeply oversold conditions on the daily RSI. If the New York session drives price above the 154.20 local supply, we could see a rapid liquidity run into the 155.20 FVG. Traders can look for lower timeframe (15m/5m) market structure shifts (MSS) to ride this corrective wave. However, this should be treated as a counter-trend scalp, taking profits before price taps into the premium array at 155.20.

Bearish Scenario

The primary SMC setup involves waiting for a retracement into the 154.78 or 155.20 premium zones. If price reaches these levels and prints a bearish displacement with a clear MSS on the 15-minute chart, it signals that smart money is defending the order block. The entry would be on the subsequent return to the newly formed FVG, targeting the 152.10 sell-side liquidity. Alternatively, a high-volume breakdown below the current 153.50 consolidation would indicate immediate continuation toward 152.10.

Economic Calendar This Week

Volatility will remain elevated due to key macroeconomic catalysts. Traders must manage risk around these high-impact events:

• US CPI Data: Critical for gauging the Federal Reserve's next move ahead of the upcoming FOMC meeting.
• Bank of Japan Commentary: Any further hawkish rhetoric will accelerate the Yen's strength.
• US Retail Sales: Will provide insight into consumer strength and potential dollar direction.

FAQ

What is the current trend for USD/JPY? The higher timeframe trend has shifted to bearish following the break of structure below 155.20, driven by BoJ rate hike expectations and shifting US yield dynamics.

How do I trade the 155.20 level? In SMC terms, 155.20 is a bearish breaker block. Traders should wait for price to retrace to this level and look for a lower timeframe market structure shift (MSS) to enter short positions targeting 152.10.

Risk Disclaimer

Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Past performance is not indicative of future results. The analysis provided in this article is for educational purposes only and does not constitute financial advice. Never risk more than you can afford to lose.

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