USDJPY: Bulls Hold Ground, but BOJ Risks and Geopolitics Stir Yen Tailwinds

Momentum & Policy Divergence

The USDJPY pair trades with a mildly bullish bias, underpinned by Fed–BoJ policy divergence. The Fed’s hawkish hold, backed by resilient U.S. wage growth, keeps the dollar buoyed. Meanwhile, the Bank of Japan’s cautious tone—holding rates at 0.5% but acknowledging inflation risks—hints at potential tightening later in 2025, offering medium-term yen support.

Price Action Summary

• Support: 144.40, then 143.50
• Resistance: 145.50, followed by 146.00–146.30
• The pair remains above its 50-day SMA, sustaining the short-term uptrend, but overbought signals on intraday charts suggest possible stalling near 146.00.

Geopolitical Backdrop

Ongoing Middle East tensions and global yield convergence fuel safe-haven demand for the yen, which could cap upside momentum for USDJPY—even temporarily.

Catalysts to Watch

• U.S. CPI & labor data
• Any shift in BoJ tone or bond market intervention
• Geopolitical Escalations Impacting Risk Sentiment

USDJPY – H4 Timeframe

The SBR (Sweep-Break-Retest) price action pattern at the top of the 4-hour timeframe chart of USDJPY is a substantial basis for a bearish bias. However, this sentiment enjoys further confluence from factors like the FVG (Fair Value Gap), the double bearish break of structure, trendline resistance, and finally, the critical zone of the Fibonacci retracement tool between levels 76% and 88%.

Direction: Bearish

Target- 145.445

Invalidation- 151.429

CONCLUSION

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