USDJPY Technical Analysis Summary
Published on March 18, 2026, by Greg Michalowski
Market Overview
The USDJPY currency pair has reached a new high for the year, trading above the previous week's high of 159.748. This upward movement is attributed to rising yields following the Federal Open Market Committee (FOMC) rate decision and subsequent comments from Federal Reserve Chair Jerome Powell.
FOMC Insights
Powell's remarks were characterized as mildly hawkish, indicating a cautious approach towards interest rate cuts. Key points from his speech included:
- Refusal to commit to rate cuts without clear progress on inflation.
- A shift in the dot plot suggesting fewer anticipated cuts in the future.
- An explicit statement prioritizing inflation control over employment concerns.
- Questioning the permanence of tariff-induced inflation, which marks a shift from previous Fed optimism.
However, Powell also provided a dovish counterpoint by ruling out immediate rate hikes, suggesting confidence that tariff-related inflation will diminish by mid-year, and emphasizing that long-term inflation expectations remain stable.
Geopolitical Considerations
A significant wildcard in the current economic landscape is the situation in the Middle East. Powell acknowledged uncertainty in modeling the impacts of geopolitical tensions, particularly regarding oil and energy prices, which could influence future Fed meetings.
Current Yield Trends
As a result of these developments, U.S. yields have increased, with the two-year yield rising by 8.1 basis points to 3.751%, and the ten-year yield climbing above 4.25% to 4.2571%, up 5.5 basis points.
USDJPY Price Targets
The USDJPY is currently trading at its highest level since July 2024. Key resistance levels to watch include:
- Natural resistance at 160.00
- Swing high from April 2024 at 160.25
- Previous high from 2024 at 161.919