Dollar-Yen Nears ‘Death Cross’ as Washington Backs a Stronger Yen

The dollar-yen exchange rate (USDJPY) is close to forming a "death cross," a chart pattern that technical analysts read as the start of a longer-term downtrend. As of Sept. 27, the crossover was expected before the end of the following week, MarketWatch reported. If it forms, the signal would line up with what the Trump administration and the Bank of Japan have been trying to achieve: a stronger yen.

A falling dollar-yen rate means the yen is gaining against the dollar. The pattern applies to this one currency pair, not to the dollar against all currencies.

What happened on Friday

On Friday, Sept. 25, the dollar-yen rate dropped 1% in afternoon trading, on track for its biggest one-day decline in three weeks. The move came as Treasury Secretary Scott Bessent posted on X about President Trump's endorsement of the "desirability of a strong yen," a goal the Bank of Japan has been pushing for.

The rapid rise in the dollar-yen rate had threatened Japan's economy and is unwanted by the Trump administration, according to MarketWatch. In late July, the U.S. Treasury and the Bank of Japan intervened together to halt the climb. Bessent has declared to financial markets: "I am the house now."

Many market participants expected the effect to fade. Government intervention in currency markets has a record of failing, sometimes badly, as in the collapse of the British pound in 1992 and the Asian financial crisis of the late 1990s. Bessent's recent attempts to slow the rise in longer-term Treasury yields have also fallen short.

What the chart shows

The technical picture suggests that this time the intervention may have worked. After a brief rebound, the dollar-yen rate broke on Sept. 3 below a trend line that had tracked its 17-month rally from the April 2025 lows. Buyers then pushed the rate back up to test that line, and Friday's selloff confirmed the break.

The selloff also came right after the rate tried and failed to climb back above its 200-day moving average, a level many chart watchers treat as the dividing line between longer-term uptrends and downtrends. "Today's failure at the 200-day moving average leaves the [currency] pair vulnerable to a test of 152 support, near the 2026 lows," wrote Ari Wald, head of technical analysis at Oppenheimer & Co.

What a death cross does and does not signal

A death cross occurs when the 50-day moving average, which tracks shorter-term trends, falls below the 200-day moving average. It is read as the point where a short-term decline becomes a longer-term downtrend. This would be the first death cross for dollar-yen since March 25, 2025.

Past signals show how much the outcome varies. After the March 2025 death cross, the rate fell another 6% before bottoming about a month later. After the previous one, on Sept. 9, 2024, the rate bottomed a week later after falling just 1.8% more.

Wald cautioned against treating the pattern as a timing tool. "We like to say that every major downside move starts with a death cross, but not every death cross leads to a major decline," he wrote. In the current setup, though, he said the signal "aligns with a broad loss of momentum" and "strengthens the case for a trend reversal."

The moving averages and the 152 level

• Whether the 50-day moving average crosses below the 200-day, confirming the death cross.
• The 152 level that Wald identified as support, near the 2026 lows.
• Further statements from the Treasury, the White House or the Bank of Japan on the yen, and any sign of renewed joint intervention.
• Whether the yen's gains hold if the economic factors that drove the earlier rally reassert themselves.