USD/JPY bearish outlook.

The USD/JPY reference rate surged to 157.888 on 2026-09-18, rising 1.41% in one day and 2.50% over five days, pushing it well above both the 5-day average of 155.637 and the 20-day average of 156.848. This sharp rebound follows a steep decline from early-September highs near 160.16 to a low of 153.27 on 2026-09-09, suggesting the recent dollar strength may be a corrective rally within a broader consolidation rather than sustainable momentum. Given the proximity to prior resistance and the speed of the advance, mean-reversion pressure could emerge for the assessment date of 2026-09-21.

What could change the view. The FOMC meeting concluded on 2026-09-16 with accompanying economic projections, and any hawkish interpretation not yet fully priced could extend dollar strength. Past declines do not guarantee reversal.