Trade review and tips for trading the Japanese yen

The price test of 154.37 occurred as the MACD indicator began moving down from the zero line, confirming the right entry point to sell the dollar. As a result, the pair fell about 70 pips.

The revised Cabinet Office report showed Japan's economy grew 1.4% year-on-year in the latest quarter versus a prior forecast of 1.1%. GDP reflects growth momentum, and an upward revision matters because it reinforces confidence in the economy's resilience. Government spending and net trade made the main contributions to the revision, and the downward revision to business capital investment was smaller than previously thought. In other words, the economy looks stronger than the first estimate implied.

For the yen, this is, in my view, a key signal, since stronger growth directly supports the Bank of Japan's arguments for raising borrowing costs. Economists already expect a rate hike on September 18, and some foresee another step in December; that prospect of sustained tightening favors the national currency. The more confidently the market prices BOJ normalization, the faster the policy gap with the Federal Reserve — long the main reason for yen weakness — narrows.

That is why I link the yen's rapid rise versus the dollar not only to ongoing currency interventions but also to a fundamental shift in rate expectations. While the BOJ demonstrates willingness to continue tightening and fresh data frees its hands, the yen retains solid support for further strength.

For intraday strategy, I will rely mainly on Scenarios No. 1 and No. 2.

Buy scenarios

Scenario No. 1: I plan to buy USD/JPY today if the entry point around 153.98 (the green line on the chart) is reached, with a target to rise to 154.37 (the thicker green line on the chart). Around 154.37, I intend to exit long positions and open short positions in the opposite direction (expecting a 30–35 pip move in the opposite direction from that level). It is best to return to buying the pair on corrections and significant pullbacks. Important! Before buying, make sure the MACD indicator is above the zero line and is just beginning to rise from it.

Scenario No. 2: I also plan to buy USD/JPY today if it tests 153.65 twice in a row while the MACD indicator is in an oversold area. This will limit the pair's downside potential and lead to an upward reversal. One can expect a rise toward the opposite levels of 153.98 and 154.37.

Sell scenarios

Scenario No. 1: I plan to sell USD/JPY today only after the 153.65 level (the red line on the chart) is broken, which will lead to a rapid decline in the pair. The key target for sellers will be 153.23, where I plan to exit shorts and immediately open longs in the opposite direction (expecting a 20–25 pip move in the opposite direction from that level). Sellers will return at any moment — we only need any hint from the central bank. Important! Before selling, make sure the MACD indicator is below the zero line and is just beginning to decline from it.

Scenario No. 2: I also plan to sell USD/JPY today in the event of two consecutive tests of 153.98 when the MACD indicator is in an overbought area. This will limit the pair's upside potential and lead to a downward reversal. One can expect a decline toward the opposite levels of 153.65 and 153.23.

What to Look for on the Chart:

• Thin Green Line – Entry price at which you can buy the trading instrument;
• Thick Green Line – Estimated price where you can set Take Profit or manually secure profits, as further growth above this level is unlikely;
• Thin Red Line – Entry price at which you can sell the trading instrument;
• Thick Red Line – Estimated price where you can set Take Profit or manually secure profits, as further decline below this level is unlikely;
• MACD Indicator. When entering the market, it's important to consider overbought and oversold zones.

Important: Beginner traders in the Forex market need to be very cautious when making entry decisions. It is best to stay out of the market ahead of significant fundamental reports to avoid being caught in sharp price fluctuations. If you decide to trade during news releases, always set stop orders to minimize losses. Without stop orders, you can quickly lose your entire deposit, especially if you do not employ money management practices and trade large volumes.

Also, remember that successful trading requires a clear trading plan, similar to the one provided above. Making spontaneous trading decisions based on current market conditions is inherently a losing strategy for intraday traders.