USD/JPY continues bearish bias after hawkish BoJ minutes
ITF Team3 min read
USD/JPY stays under pressure as BoJ minutes signal more rate hikes, with the pair near 157.40 and a key 158.00 break needed for further downside.
Key takeaways
- The USD/JPY pair hovered around 157.40 on 11/5/2026, failing to break the 158.00 resistance.
- BoJ minutes released on 11/5/2026 reaffirmed a plan to keep raising rates, supporting the yen.
- CME FedWatch Tool showed over 80% probability of a Fed hike in December 2026.
- US ADP employment added 86,000 jobs in October 2026, boosting Fed hike expectations.
The USD/JPY pair struggled to build on the modest rebound from the 157.40 area on 11/5/2026, marking a second consecutive day of selling pressure. Traders are now looking for a decisive break below 158.00 before committing to further downside, as a mix of BoJ hawkishness, US political developments and upcoming US payroll data shape the market.
BoJ minutes lift the yen and curb dollar gains
Minutes from the Bank of Japan’s September meeting, released on 11/5/2026, showed policymakers agreeing that it remains appropriate to keep raising the policy rate and to adjust the level of monetary easing. The language reinforced market expectations of a December rate hike, giving the yen a modest boost. In a market where the dollar has been on a selling bias, the yen’s relative strength adds further downward pressure on USD/JPY.
The yen’s support from the BoJ is compounded by the broader US environment. Democrats secured control of both houses of Congress in the midterm elections, raising concerns about fiscal gridlock and limiting government spending. At the same time, Democratic leaders signaled a push to end the Iran war, prompting traders to price out geopolitical risk premiums. Crude oil prices fell sharply, easing inflation worries and pulling US bond yields lower, which in turn kept the dollar subdued.
Fed expectations and US labour data keep the dollar in focus
Despite the yen’s support, hawkish expectations for the US Federal Reserve remain a counter‑balance. The CME Group’s FedWatch Tool indicated an over 80% probability that the Fed will raise its benchmark rate again in December 2026. This probability was reinforced by a better‑than‑expected ADP employment report released on 11/4/2026, which showed private‑sector jobs rose by 86,000 in October.
The market’s attention now turns to the US Non‑Farm Payrolls (NFP) report due on 11/6/2026. A strong payroll number could reignite demand for the dollar, while a weaker reading would likely deepen the current bearish bias in USD/JPY. Traders are therefore cautious, preferring to wait for a clear breakout of the short‑term range before taking fresh directional bets.
Read also: GBP/USD edges higher above 1.3450 ahead of BoE rate decision
Technical picture: range bound and key levels
Technically, the pair remains trapped below its 200‑day simple moving average (SMA) at 158.65, a barrier that has repeatedly halted upside moves. The recent rally failed to sustain above this level, suggesting that bullish momentum is still capped. On the upside, a daily close above 158.65 would be needed to shift the bias.
On the downside, the overnight swing low around 157.40 acts as immediate support, with a secondary floor near 157.00 and the lower edge of the trading range around 156.65. A break below 156.65 would likely trigger a fresh bearish wave, opening the path toward lower monthly lows.
What traders should monitor next
Key data and events to watch include the US NFP report on 11/6/2026, any further commentary from the BoJ on its rate path, and the Fed’s own policy statements later in December. In terms of price action, the 158.00 level remains the critical resistance for a rally, while 156.65 marks the next support for a down move.
- 158.00 – resistance level that must be broken for a sustained rally
- 156.65 – lower boundary of the current range, break could trigger further depreciation
- 200‑day SMA at 158.65 – technical barrier capping upside momentum
- Next major data: US Non‑Farm Payrolls (11/6/2026)
Frequently asked questions
Why is the USD/JPY pair struggling to move higher after the rebound?
The pair is stuck below the 200‑day SMA at 158.65 and faces resistance at 158.00. BoJ minutes signalling more rate hikes support the yen, while US political and geopolitical factors keep the dollar on a selling bias, limiting further upside.
How do the BoJ minutes affect the yen’s outlook?
The minutes released on 11/5/2026 confirmed that policymakers see it appropriate to keep raising rates and adjust monetary easing. This reinforces market bets on a December rate hike, giving the yen a modest lift and adding pressure on USD/JPY.
Official data sources
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This article is compiled from international market news for information only. It is not investment advice.