The Battle for 155: Hawkish FOMC Minutes Fuel USD/JPY Breakout Hopes
Author: Zain Vawda
Date: February 19, 2026
Summary
The USD/JPY currency pair has been experiencing significant movement, primarily driven by the Federal Reserve's recent hawkish stance on interest rates. The FOMC minutes indicated a cautious approach towards rate cuts, which has bolstered the US Dollar against the Yen.
Key Drivers of the USD/JPY Movement
- Hawkish FOMC Minutes: The minutes from the January FOMC meeting revealed that policymakers are hesitant to cut rates without clear evidence of cooling inflation, leading to increased US Treasury yields and a stronger Dollar.
- Japanese Export Surge: Japan reported a remarkable 16.8% year-on-year increase in exports for January 2026, the highest since late 2022. However, this positive data did not significantly strengthen the Yen due to the prevailing policy gap with the Fed.
- Japan-US Investment Ties: Japan's announcement of a $36 billion investment in US oil, gas, and mineral projects under a broader $550 billion trade pact has implications for capital flows, further supporting the Dollar.
Technical Analysis
The USD/JPY is at a critical technical juncture, with a focus on the 155.00 resistance level. A sustained close above this level could signal a bullish trend towards 158.00. However, analysts caution that if the pair fails to break above the recent swing high of 157.66, the overall bearish trend may persist.
Outlook
Looking ahead, the trajectory of USD/JPY will likely be influenced by upcoming US labor market data and further comments from Bank of Japan officials. While Japan's trade resilience is a long-term positive for the Yen, the Fed's "higher-for-longer" narrative remains the dominant force affecting the pair's movement.
Conclusion
Traders are advised to monitor for a sustained close above the 155.00 level to confirm whether the current rally has the potential to retest year-to-date highs.