USD/JPY: I was expecting more volatility, but it seems to be staying in range

By FXstreet

Sep 10, 2025 10:12

What a disappointment with the dollar! I was convinced we would see more action, but it seems that the USD has settled into a boring range against the Japanese yen. Analysts from UOB Group (Quek Ser Leang and Peter Chia) also seem to have given up on this reality.

The roller coaster that wasn't

24-HOUR VIEW: "Yesterday we said that the USD 'could retest Friday's low of 146.80'. We thought that 'any further decline would hardly break the key support at 146.55'. We were correct on the first part, but failed on the second, as the USD fell to 146.29. However, it then rebounded strongly to close almost unchanged at 147.41 (-0.07%)."

The bearish momentum seems to have evaporated with that rebound, and the USD is unlikely to continue weakening. Today, we expect the USD to remain within a range, probably between 147.00 and 148.00. How boring, right?

1-3 WEEKS OUTLOOK: On Monday (8 Sep, with the pair at 148.35) we noted that 'sharp but short movements have resulted in a mixed outlook'. We also indicated that the USD 'could move within a range between 146.55 and 149.55'.

Although the USD briefly broke below 146.55 yesterday, it bounced back strongly from 146.29. That small drop did not generate significant bearish momentum. The outlook remains mixed, but we now expect the USD to trade in a range of 146.00/149.00.

The truth is, with all the political uncertainty in Japan and the weak employment data we've seen, I expected the yen to show more weakness. But the markets have their own opinion and it seems that no one wants to make a strong bet in either direction.

And meanwhile, gold keeps rising nonstop towards $3900 while the USD/JPY is dozing off in this range. What an irony! The most volatile pair of last year now looks like a pond.

Institutional investors seem to be waiting to see what happens with the LDP vote and the ISM services data before taking more aggressive positions. And in the meantime, here we are, stuck between 146 and 149.

Disclaimer: For informational purposes only. Past performance does not guarantee future results.