The USD/JPY forecast February 2026 reveals mounting bearish pressure as the Bank of Japan signals potential policy normalization. The pair currently trades at 145.50, down 0.8% from yesterday’s close of 146.70. Compared to last week’s high of 148.20, the currency pair has declined by 1.8%, reflecting renewed yen strength. The monthly low of 144.80 remains a critical support level, while the broader trend remains bearish as the dollar weakens against major currencies. Over the past three trading sessions, USD/JPY has experienced significant volatility, with volumes spiking amid heightened geopolitical tensions and shifting central bank policies.
USD/JPY Forecast February 2026 – Market Overview
The USD/JPY forecast February 2026 is shaped by a confluence of factors, including the Bank of Japan’s recent policy announcements and escalating trade tensions. The pair’s current price of 145.50 reflects a sharp decline from last week’s peak of 148.20, marking a 1.8% drop. This downward momentum is reinforced by the monthly low of 144.80, which serves as a critical support level. The broader trend remains bearish, with the dollar weakening against the yen amid expectations of BoJ rate hikes. Over the past three trading sessions, USD/JPY has experienced heightened volatility, with trading volumes surging as investors reassess their positions.
Fundamental Analysis and Key Drivers
The USD/JPY forecast February 2026 is heavily influenced by the Bank of Japan’s policy normalization efforts. Recent reports suggest the BoJ may raise rates as early as April, with economists forecasting a terminal rate of 1.5% by September. This hawkish shift contrasts with the Federal Reserve’s dovish stance, creating downward pressure on USD/JPY. Bloomberg reports that yen strength is further bolstered by Japan’s fiscal stimulus package, which is expected to boost economic growth. Meanwhile, geopolitical tensions in the Middle East and Europe are driving safe-haven flows into the yen. Upcoming economic data releases, including US PCE inflation on February 20 and Japanese CPI on February 22, will provide further clarity on the pair’s trajectory.
Traders may also want to review EUR/USD Forecast January 2026: 1.20 Critical Bearish Warning.
USD/JPY Technical Analysis Today
The USD/JPY forecast February 2026 identifies key technical levels that could dictate the pair’s direction. Immediate support lies at 144.80, followed by 143.50 and 142.20. Resistance levels are positioned at 146.70, 148.20, and 149.50. The RSI indicator currently reads 38, signaling bearish momentum, while the MACD line remains below the signal line, confirming the downtrend. Chart patterns suggest a potential bearish channel formation, with the 50-day moving average at 147.50 acting as a dynamic resistance level. A break below 144.80 could accelerate the pair’s decline toward 142.20.
Trading Outlook and Price Prediction
The USD/JPY forecast February 2026 maintains a bearish bias, driven by BoJ policy normalization and dollar weakness. In a bullish scenario, a break above 148.20 could target 149.50, though this appears unlikely given current fundamentals. In a bearish scenario, a break below 144.80 could lead to a test of 142.20, with further downside risks if geopolitical tensions escalate. Key risk factors include unexpected Fed rate hikes or a de-escalation of global conflicts, which could weaken the yen. Traders should closely monitor US PCE inflation on February 20 and Japanese CPI on February 22 for potential market-moving catalysts. As Reuters reports.
