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The Japanese Yen remained under clear pressure against the US Dollar through the third quarter, with USD/JPY hitting highs not seen since mid-January. However, while interest-rate differentials between the two clearly present the Yen at clear disadvantage, there will be much more to its trading as 2018 bows out. It’s notable too that, despite those highs for USD/JPY, the pair leaves the quarter not much higher than where it started the period – or the year.

USD/JPY Price Chart: Monthly Timeframe (December 2013 to September 2018) (Chart 1)

Japanese Yen Q4 Forecast: Yen Still Lacks Interest Rate Support, Haven Bids Will Endure

The impact of increasing hawkish Fed monetary policy bets and rising trade war fears certainly left their mark on USD/JPY prices. While progress has been slow, the break above the triangle top dating back to June 2015 suggests the uptrend from 2012 to 2015 could eventually be revived. To turn the market over to the bulls in earnest, USD/JPY needs to make more progress on the break of its three-year triangle than what was registered in the third quarter.If the US Dollar continues to appreciate against the Japanese Yen with further monthly candle closes above the congestion pattern’s waypoint, then USD/JPY may well be on its way to revisit the highs from 2015.

See the complete Q4’18 Japanese Yen forecast as well as forecasts for the other major currencies, equities, Gold, and Oil.

--- Written by David Cottle, Market Analyst and Daniel Dubrovsky, Junior Analyst