Trade breakdown and trading tips for the Japanese yen

Due to low market volatility, prices did not reach the levels I had outlined.

Given the tense situation surrounding possible intervention by the Bank of Japan in the yen exchange rate, traders are tending to adopt a more cautious, wait-and-see stance. Going forward, special attention will be given to US Producer Price Index (PPI) data and the labor market.

A higher-than-expected PPI reading may increase concerns about accelerating inflation in the United States and, as a result, further support gains in the USD/JPY pair. Alongside the headline Producer Price Index, data for the PPI excluding food and energy will also be released. This sub-index is considered a more reliable measure of underlying inflation trends, as it removes volatile components. The dynamics of this indicator will also significantly influence expectations regarding future policy decisions by regulators. In addition, the market will receive weekly Initial Jobless Claims data. This indicator reflects the current state of the labor market and is an important gauge of its conditions. Weak data could lead to a minor correction in the pair.

Regarding the intraday strategy, I will primarily rely on scenarios #1 and #2.

Buy Signal

Scenario #1: I plan to buy USD/JPY today at an entry point around 160.61 (green line on the chart), targeting a rise toward 160.95 (thicker green line on the chart). At 160.95, I will exit long positions and open short positions in the opposite direction (expecting a 30–35 point reversal from that level). Further upward potential in the pair today is possible in the case of strong US inflation data. Important: before buying, ensure that the MACD indicator is above the zero line and has just started rising from it.

Scenario #2: I will also consider buying USD/JPY if there are two consecutive tests of 160.47, while the MACD indicator is in oversold territory. This would limit downward potential and trigger an upward reversal. A move toward the opposite levels at 160.61 and 160.95 can be expected.

Sell Signal

Scenario #1: I plan to sell USD/JPY after a break below 160.47 (red line on the chart), which would lead to a sharp decline in the pair. The key target for sellers is 160.14, where I will exit short positions and immediately open long positions in the opposite direction (expecting a 20–25 point rebound). Downward pressure on the pair may return in the case of Bank of Japan intervention. Important: before selling, ensure that the MACD indicator is below the zero line and has just started moving downward.

Scenario #2: I will also consider selling USD/JPY if there are two consecutive tests of 160.61, while the MACD indicator is in overbought territory. This would limit upward potential and trigger a downward reversal. A decline toward the opposite levels at 160.47 and 160.14 can be expected.

What is on the chart:

• Thin green line – entry price for buying the trading instrument
• Thick green line – expected take-profit level or area for profit-taking, as further gains above this level are unlikely
• Thin red line – entry price for selling the trading instrument
• Thick red line – expected take-profit level or area for profit-taking, as further declines below this level are unlikely
• MACD indicator – overbought and oversold zones should guide entry decisions

Important: Beginner Forex traders should be very cautious when entering the market. Before major fundamental releases, it is best to stay out of the market to avoid sharp price fluctuations. If you choose to trade during news releases, always use stop-loss orders to minimize losses. Without stop-loss protection, you can lose your entire deposit very quickly, especially if proper money management is not applied and large volumes are traded.

Remember that successful trading requires a clear trading plan, similar to the one presented above. Spontaneous trading decisions based on current market conditions are, by definition, a losing intraday strategy.