USD/JPY and Nasdaq Forecast: Focus Shifts from Fed to BOJ
By Razan Hilal | Published on July 30, 2026
Overview
The article discusses the current market dynamics following the Federal Reserve's decision to maintain interest rates at 3.75%. With the Fed's July meeting concluded, attention is now shifting towards the upcoming Bank of Japan (BOJ) policy decision, which is anticipated to significantly impact global markets.
Key Market Developments
- The Federal Reserve has left interest rates unchanged, signaling a potential rate hike later in the year if inflation and geopolitical risks persist.
- Market focus is now on the BOJ meeting, which could be a major catalyst for currency and equity markets.
- USD/JPY has experienced a sharp decline, retreating over 100 pips, influenced by renewed carry trade unwind risks.
- US Treasury yields remain elevated, and geopolitical tensions, particularly in the Middle East, continue to affect market sentiment.
Expectations for September Rate Hike
According to the CME FedWatch Tool, there is over a 60% probability of a 25-basis-point rate hike in September, which supports the US dollar and constrains broader risk appetite.
Technical Analysis
USD/JPY Price Outlook
The USD/JPY is showing signs of pullback risks below the 164 resistance level, with critical Fibonacci extension levels identified:
- 164: 100% Fibonacci extension
- 165: 127.2% Fibonacci extension
- 168: 161.8% Fibonacci extension
- 170: Upper boundary of the shorter-term channel
- 180: Next major upside zone if 170 resistance fails
A break below 162.20, 161.20, and 160.50 could expose lower support levels, potentially leading to a rebound within the broader bullish trend.
Nasdaq Price Outlook
The Nasdaq's outlook remains cautiously bearish, trading below key resistance levels. For a bullish scenario, the index must reclaim levels above 27,700 and 28,000, with critical resistance at 29,400. Conversely, failure to hold 27,000 could lead to further declines towards 26,000.
Conclusion
Investor sentiment is cautious due to mixed earnings reports and ongoing geopolitical tensions. The upcoming BOJ meeting is critical, as it may influence volatility across currencies and equity markets. The article emphasizes the importance of monitoring key technical levels for both USD/JPY and Nasdaq as market conditions evolve.