2026-10-23 Readings lean bearish
USD/JPY drops below 157.00 as yen strengthens ahead of BoJ meeting
The US dollar is under pressure against the Japanese yen, trading near 156.97 after breaking below recent support. Declining US bond yields and expectations around the upcoming Bank of Japan policy meeting are driving the yen's strength. The pair has seen a steady decline over the past 24 hours, reflecting a broader shift in momentum.
Trend and momentum
The 4-hour and 1-hour trend structures are both pointing down, supported by bearish momentum indicators. The 1-hour RSI sits at 47.01, while the 4-hour RSI is lower at 35.97, indicating sustained selling pressure without being deeply oversold. The 1-hour Bollinger Bands show price action inside the bands with no squeeze, and the pair has already used 137% of its average daily range, highlighting significant intraday volatility.
Key levels
Key levels to watch include yesterday's high at 158.252 and low at 156.688. A break below yesterday's low could open the door to the recent 4-hour low of 156.076. On the upside, resistance lies at last week's low of 157.547 and the 4-hour high of 158.606. Clearing these upper levels would be needed to shift the immediate bearish structure.
News and events this week
This week is critical for both currencies, highlighted by the Bank of Japan's monetary policy meeting on October 29-30, where they will also release their Outlook Report. Markets are weighing BoJ rate hike bets and intervention risks against shifting expectations for the US Federal Reserve. Declining US bond yields have recently weighed on the dollar, making any upcoming US economic data pivotal for the pair's direction.
What would push it higher
If US bond yields rebound or the BoJ signals a dovish stance at their upcoming meeting, the pair could find support and push back above the 157.50 level.
What would push it lower
If the BoJ hints at further rate hikes or US data continues to disappoint, the pair could break below 156.00 and extend its current downtrend.
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