USD/JPY: the consumer price index in the Tokyo metropolitan area rose from 1.4% to 1.7%

Jun 26, 2026, 1:12:15 PM

Current trend

At the beginning of last month, within a long-term ascending channel, the USD/JPY pair, against foreign exchange interventions by the Japanese government, tested its lower border around 156.25 (Murrey [0/8]), but failed to consolidate below it, resuming growth.

The American dollar is strengthening against the increasing probability of monetary policy tightening by the US Fed soon, driven by incoming macroeconomic statistics. The May personal consumption expenditures price index increased from 3.8% to 4.2%, and the core indicator rose from 3.3% to 3.4%. At the same time, the gross domestic product (GDP) in the first quarter reached 2.1%, significantly higher than the forecasts of 1.6%. The labor market also maintains stability. Unemployment has remained at 4.3% for several consecutive months, and the number of new nonfarm jobs reached 172.0k. In these conditions, according to the dual mandate of the regulator, the central task for it becomes the fight against inflation, implying an imminent increase in interest rates. Thus, the President of the Federal Reserve Bank (FRB) of New York, John Williams, stated that the consumer price index still significantly exceeds the target of 2.0%, and suggested that it would return to it no earlier than 2028. According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the majority of traders expect a transition to “hawkish” rhetoric in September.

Experts also do not rule out adjusting the cost of borrowing by the Bank of Japan, slowing the asset growth. However, this decision is hindered by the slowing of inflation dynamics. Thus, the June consumer price index in the Tokyo metropolitan area rose from 1.4% to 1.7% in the main terms and from 1.3% to 1.7% in the core ones, remaining below the required 2.0% for the fifth consecutive month. At the same time, progress in peace negotiations between the US and Iran suggests an easing of the energy crisis, potentially slowing price growth even further, forcing policymakers to abandon monetary policy tightening in the medium term, putting pressure on the yen.

Support and resistance

The trading instrument is moving within a long-term ascending channel, attempting to consolidate above 161.71 (Murrey [7/8]), after which a continuation of growth is expected with the targets at 163.28 (Murrey [+1/8]) and 164.06 (Murrey [+2/8]). However, in case of a breakdown of 159.37 (Murrey [4/8]) below the middle line of Bollinger bands, the price will be able to leave the range and decline to the area of 157.03 (Murrey [1/8]), 156.25 (Murrey [0/8]).

Technical indicators maintain a buy signal. Bollinger bands are directed upwards, the MACD histogram is increasing in the positive zone, and the Stochastic is directed horizontally near the overbought zone, not excluding a limited correction.

Resistance levels: 161.71, 163.28, 164.06.

Support levels: 159.37, 157.03, 156.25.

Trading tips

Long positions can be opened from 162.00 with the targets at 163.28, 164.06, and stop loss 161.10. Implementation period: 5–7 days.

Short positions can be considered below 159.37 with the targets at 157.03, 156.25, and stop loss 160.70.

Scenario

Time frame	Weekly
Recommendations	BUY STOP
Entry Point	162.05
Take Profit	163.28, 164.06
Stop Loss	161.10
Support levels	156.25, 157.03, 159.37, 161.71, 163.28, 164.06

Alternative scenario

Recommendations	SELL STOP
Entry Point	159.35
Take Profit	157.03, 156.25
Stop Loss	160.70
Stop Loss	156.25, 157.03, 159.37, 161.71, 163.28, 164.06