The USDJPY currency pair keeps trading upward, with the price reaching 157.3 during the early hours of Thursday's session. This is the yen’s weakest point in the past 10 months. The key factor exerting pressure on the Japanese currency is expectations of large-scale fiscal stimulus from the new government of Prime Minister Sanae Takaichi. The spending package, which is projected to exceed 20 trillion yen, raises serious concerns about the country's economy, already burdened with the highest debt level among major nations. Consequently, authorities are now facing the music as the “sell Japan” narrative gains traction. As a result, investors are taking both the yen and Japanese government bonds off their hands.
Political uncertainty is another factor weighing on the Asian currency. Takaichi, known for her adherence to expansionist policy, did not approve the Bank of Japan’s (BoJ) plan to raise interest rates in the near term. Tensions between the government and the central bank are heightening. The unwavering determination of several BoJ officials is unlikely to outweigh political pressure, and no decisive actions from the regulator are expected next month. Investor confidence is fading, with capital outflows increasing.
A stronger dollar is further exacerbating the yen’s position. The minutes from the Federal Reserve’s (Fed) previous meeting showed that a number of policymakers do not see solid reasons for a rate cut in December. The likelihood of monetary easing next month continues to decline, now being less than 25%. This market sentiment underpins the greenback.
From a technical perspective, an ascending trend is visible on the USDJPY daily chart today. The Chaikin Oscillator is in positive territory and keeps heading upward, indicating increased bullish activity and no signs of bearish divergence. The Stochastic Oscillator is approaching the overbought zone, signaling that the market may be overheating. However, these conditions are subject to change; a reversal is not yet apparent. While consolidation or correction phases are likely in the near term, fundamental factors still point to the pair’s further growth.
Keep in mind the following trading strategy:
Buy USDJPY at the current price or during a short-lived correction. Take profit: 160. Stop loss: 155.
This forecast remains valid from November 20 to November 27, 2025.
This content is for informational purposes only and is not intended to be investing advice.
