USD/JPY Retreats Below 156.00 Ahead of BoJ Policy Decision

Key Facts

1USD/JPY retreated from a near two-week high of 156.40, snapping a three-session winning streak.

2Markets are awaiting Kazuo Ueda’s policy guidance as a BoJ rate hike is largely priced in.

Reflecting a shift in market focus from US monetary policy to the Bank of Japan's next move, the USD/JPY pair retreated from a near two-week high of 156.40, snapping a three-session winning streak. According to analyst reports, the pair struggled to sustain its recovery above the 156.00 level following the Federal Reserve's recent rate hike. Markets are now closely monitoring Governor Kazuo Ueda’s policy guidance, as a potential rate hike by the Bank of Japan is largely priced in by traders responding to persistent inflationary pressures.

This price action occurs within a complex technical environment where 156.00 acts as a significant ceiling, while yen strength risks build below the 155.00 level. Per market analysis, traders are weighing whether the BoJ will signal further tightening later this year, which could revive yen demand. Conversely, the wide interest rate differential between the US and Japan remains a headwind for the yen, despite Japanese officials reiterating their commitment to maintaining orderly currency moves in coordination with US authorities.

As of September 17, 2026, market participants are watching for a potential move below the 155.00 support level, which could expose the pair to deeper declines toward 153.30. In the absence of live pricing data in the current database, the upcoming Bank of Japan policy decision and Kazuo Ueda's commentary remain the primary catalysts for direction. Recent economic calendar events, including inflation data from Canada and Brazil, continue to shape the broader macro backdrop for global currency markets.