USDJPY forms a Wedge with downside breakout risk

The USDJPY pair maintains its upward momentum, with investors focusing on the prospects of the Bank of Japan’s monetary policy. The rate currently stands at 147.65. Find out more in our analysis for 3 October 2025.

USDJPY forecast: key trading points

• Uncertainty remains around the Bank of Japan’s next steps
• Japan’s unemployment rate rose to 2.6% in August
• Rising unemployment has increased pressure on the yen and may delay the BoJ’s rate hike decision
• USDJPY forecast for 3 October 2025: 146.30

Fundamental analysis

The USDJPY rate is rising for the second consecutive session, with buyers successfully defending the key support level at 146.65. The yen weakened after a recent climb to two-week highs, as investors shifted focus to the upcoming ruling party leadership vote this weekend, which will determine the new prime minister and set the direction for the country’s fiscal and monetary policy.

Uncertainty around the Bank of Japan’s next moves persists. Economic signals remain mixed, while global trade pressures deepen doubts about the timing of the next rate hike. At the same time, BoJ Governor Kazuo Ueda emphasised that the central bank is ready to tighten policy if economic growth and inflation meet projected levels.

However, Japan’s unemployment rate in August rose to 2.6%, the highest in the past 13 months and above market expectations of 2.4%. This data added to pressure on the yen and may further delay the BoJ’s rate hike decision.

USDJPY technical analysis

The USDJPY rate is forming a Rising Wedge pattern, suggesting a possible end to the current upward move and preparation for a reversal. The price has reached the pattern’s upper boundary near 148.00 and has begun to lose bullish momentum.

Today’s USDJPY forecast suggests a bearish impulse could develop, with the price exiting the Wedge pattern and breaking below the 147.20 support level before dipping to 146.30.

The Stochastic Oscillator further confirms waning bullish momentum as it has entered overbought territory and signals the potential start of a decline.

Summary

The USDJPY rate continues to climb amid uncertainty surrounding the BoJ policy and Japan’s rising unemployment. However, USDJPY technical analysis points to a possible decline towards 146.30 within the Wedge reversal pattern.

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