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November 20, 2025

USD/JPY Hits 11-Month High as Fiscal Risks Weigh on Yen

USD/JPY rally extends as yen weakens on fiscal concerns

USD/JPY traded around 157.65, up roughly 0.45%, and touched an 11-month high near 157.88 after headlines that Japan is preparing large additional fiscal measures and stronger-than-expected US labour data. The move reflects a mix of structural pressure on the yen — heavy government issuance and talk of a sizeable stimulus package — and renewed USD support following US labour prints and low initial jobless claims.

Market snapshot

Key short-term facts traders need to know:

  • Spot: ~157.65 intraday, high 157.88 (11-month high).
  • Technicals (4-hour): price remains above the 100 SMA (154.39); RSI ~82.5 — clearly overbought.
  • Macro drivers: reports of a ¥25T additional budget and talk of a ¥21T stimulus raising long-term issuance; US Sep NFP +119K (vs 50K expected), unemployment 4.4%, average hourly earnings +0.2% MoM.

Why the yen is under pressure

Market commentary and strategist notes (including Scotiabank) point to widening yield differentials and Japan’s accommodative fiscal stance as the primary drivers of yen weakness. Large additional borrowing and potential stimulus increase supply of government bonds, lifting yields in Japan and amplifying carry trade incentives to short the yen. See further context on how yields and BoJ signals affect USD/JPY in our US yields and BoJ piece.

On the other side, US labour data remain mixed: payrolls surprised to the upside but wage growth softened, creating a nuanced backdrop where the dollar can still get traction without clear inflation acceleration. The US Dollar Index (DXY) has edged higher, supporting USD/JPY moves.

Technical picture and key levels

From a technical perspective the setup is classic momentum with warning signs:

  • Immediate resistance: the intraday high at 157.88. A clear break and hold above that level will likely extend the trend and attract momentum-driven longs.
  • Support: short-term pullback targets include the trend-line near ~155.2 and the 100-SMA at ~154.4. These areas provide logical buy-on-dips zones with favorable risk/reward.
  • Indicators: an RSI above 80 on the 4-hour chart flags overbought conditions — expect choppy price action and the possibility of consolidation or a corrective leg lower before continuation.

Risks to the bullish case

Traders should monitor several risk events that could reverse the move:

  • BoJ policy surprise or explicit FX intervention would sharply strengthen the yen; for more on BoJ-related market dynamics see BoJ uncertainty.
  • Evidence of softer US wage growth or a sudden deterioration in US data could remove dollar tailwinds and weigh on USD/JPY.
  • Technical exhaustion given overbought readings may prompt a consolidation back toward 155.2–154.4 support.

Trade ideas and execution notes

For disciplined forex trading, consider two actionable approaches:

  1. Momentum breakout: wait for a confirmed close above 157.88 (preferably on higher-than-average volume) and target measured extensions while using a trailing stop to capture runaway moves. Keep position sizing small relative to realized volatility.
  2. Buy-on-dips: enter on retracements toward 155.2 (trend-line) or 154.4 (100 SMA) with tight stops below the next support and a 1.5–3x reward-to-risk target. This setup benefits from structural JPY weakness driven by fiscal issuance.

Execution notes: account for slippage and fast-market entries — our guide on slippage explained can help with order placement and sizing in volatile conditions. Risk-management essentials: use defined stop-losses, monitor headlines for BoJ or MOF intervention chatter, and avoid oversized position sizing into overbought technicals.

Implications for other markets

Stronger USD and higher yield differentials tend to pressure risk assets. Commodities and crypto can feel squeeze effects when the dollar rallies — Bitcoin and large-cap crypto are not immune to USD strength. Traders focused on multi-asset strategies should consider hedging or smaller allocations to risk assets while the USD/JPY trend is decisive.

Automation and tools for execution

Volatile, event-driven FX moves like this are where systematic rules and fast execution can add value. Retail traders can combine discretionary views with automated systems to manage entries, stops, and scaling plans. A dedicated Forex Trading Bot can help execute buy-on-dips or breakout strategies consistently, while the Trade Assistant Bot is useful for monitoring multi-symbol risk and adjusting exposure when headlines move markets.

Practical checklist before trading USD/JPY

  • Confirm price action around 157.88 before initiating momentum longs.
  • Use time-based filters to avoid impulsive entries during major headlines.
  • Size positions to account for potential sudden intervention or widening volatility.
  • Keep an eye on US labour data, BoJ communication, and Japanese issuance headlines.

Conclusion

USD/JPY’s move to 11-month highs reflects a confluence of structural JPY weakness from looming fiscal issuance and renewed USD support after stronger labour-market signals. Technicals are overbought, so traders should prepare for both continuation and corrective scenarios — momentum breakouts above 157.88 or buy-on-dips toward 155.2–154.4 offer the clearest setups. Whether you focus on forex trading or monitor spillovers into crypto trading, disciplined risk management is essential.

For traders who want to combine systematic rules with real-time execution, consider testing automated trading solutions. PlayOnBit provides tools to implement and automate these strategies — try the Trade Assistant Bot or explore our forex trading bot to run tested setups more consistently.