USD/JPY and FTSE 100 Forecast: Key Insights
By Fiona Cincotta, Senior Market Analyst
Date: February 24, 2026
USD/JPY Analysis
The USD/JPY currency pair has experienced a significant increase, attributed to a weaker yen following Japanese Prime Minister Takaichi's tougher stance on Bank of Japan (BoJ) rate hikes. Reports indicate that Takaichi has expressed a preference for maintaining economic growth over increasing interest rates, which has led to a 1.1% decline in the yen against the dollar, making it the worst performer among G10 currencies.
Since her election victory, Takaichi has been expected to adopt more market-friendly policies. However, her recent comments suggest a potential risk of suppressing BoJ rate hikes, especially after recent data showed Japanese core inflation cooling to 1.5%, the first dip below 2% since March 2022. Upcoming Tokyo inflation data is anticipated to confirm this trend.
In the U.S., the dollar is recovering from previous losses, which were initially driven by fiscal concerns related to Trump's announcement of a 10% global trade tariff. The uncertainty surrounding the validity of existing trade deals under the new tariff regime continues to loom over the market.
Technical Analysis
The USD/JPY is currently trading within a symmetrical triangle pattern. It has recently bounced off the rising trendline support at 152.20 and is testing the 50 SMA and falling trendline resistance at 156.00. A breakout above this level could lead to a target of 157.70, while support is identified at 154.50 and 152.80.
FTSE 100 Overview
The FTSE 100 index is slightly lower as the new 10% global tariff regime introduced by Trump raises trade tensions and concerns about global economic growth. However, the UK government has stated that it does not expect these tariffs to affect the US-UK trade deal established last year.
Financial and healthcare sectors are under pressure due to fears that tariffs may hinder economic activity, although gains in commodity-linked stocks, driven by rising crude oil and metal prices, have provided some support to the index. The FTSE has been performing better than some major indices, particularly the US Nasdaq, due to its lack of technology stocks, which have been affected by concerns over AI disruptions.
Technical Analysis
The FTSE 100 has reached a record high of 10,730, following a bullish trend since April. The index has slightly retreated, pulling the RSI away from overbought conditions. Key resistance levels are at 10,800 and 11,000, while support is found at 10,450 and 10,100. A significant drop below 9,910 would negate the longer-term uptrend.