The overnight index swaps (OIS) market for Japan’s short-term interest rates is still pricing in a 25 basis points (bps) hike to the short-term overnight policy interest rate to 0.75% before 2025 ends. The 3-month, 6-month, and 1-year OIS rates have continued to widen over the 1-month OIS rates in the past two weeks, where the 1-year OIS rate has increased from 0.67% on 8 September 2025 to 0.73% on Friday, 19 September 2025 at the time of writing (see Fig. Hence, the yield premium between the 2-year US Treasury note and the 2-year Japanese Government Bond has continued to narrow steadily since the start of the year. This ongoing narrowing process suggests that 2-year US Treasuries have become relatively less attractive versus 2-year JGBs, reducing the yield premium in favour of the dollar. Let’s now examine the USD/JPY from a technical analysis perspective to determine its latest short-term (1 to 3 days) trend bias and key technical levels to watch.