🔍 1. Fundamental Analysis
🇯🇵 Japan
BoJ & Government Still Not Moving to Defend the Yen
Market behavior continues to reflect that neither the BoJ nor the Japanese government is showing real commitment to stemming yen weakness, leaving the currency vulnerable to USD strength.
Japan PMI: Stability, Not Strength
• Japan’s Manufacturing PMI came in at 50.0, slightly above forecast.
This indicates stabilization but offers no meaningful support for the yen in the face of U.S. yield advantages.
BoJ Normalization Expectations (Medium-Term Bearish USDJPY Risk)
• Japanese yields rose into late 2025 as BoJ signaled continued policy normalization for 2026.
• These expectations could strengthen the yen later, but short term momentum remains USD dominant.

🇺🇸 United States
Volatility Sparked by Venezuela Events
• USD had an initial safe haven response following the U.S. military operation in Venezuela, but this bounce faded quickly.
This shows markets are not in a sustained risk off mode—bad for yen demand.
Fed Outlook: Easing Mostly Priced In
• With most of the Fed’s expected easing already priced in, dollar bears are finding it harder to push USD lower unless U.S. data deteriorates.
This keeps USDJPY supported near the highs.
Key U.S. Data Ahead
Upcoming CPI, retail sales, and labor indicators may cause volatility, but the directional bias remains USD favorable unless data severely underperforms.

📊 2. Technical Analysis
USDJPY trades within a strong bullish channel, although resistance near 158–159 continues to cap upside attempts.
Key Support Levels
• 156.32 — Primary intraday support
• 153.05 — Weekly correction target
• 151.55 — Trend break trigger; loss of this level invalidates bullish structure
Key Resistance Levels
• 158.30 — Immediate resistance; needs a clean break for continuation
• 159.35 — Confirmation level for renewed bullish momentum
• 160.00 — Psychological ceiling and potential BoJ intervention zone
Momentum Conditions
• Price remains above EMA50, acting as dynamic support for bulls.
• Markets repeatedly fail to stay below 158, highlighting strong demand.

📈 3. Trading Scenarios
🔵 Bullish Scenario (Primary Bias)
Conditions: Break & close above 158.30
• Target 1: 159.35
• Target 2: 160.00
• Stop Loss: Below 156.30
• Why?
o BoJ’s slow normalization and weak yen policy stance
o Fed easing priced in, but still a wide yield gap
o Technical trend intact above EMA50

🔴 Bearish Scenario (Corrective Decline)
Conditions: Break below 156.30
• Target 1: 153.05
• Target 2: 151.55
• Stop Loss: Above 158.00
• Why?
o Rising Japanese yields & BoJ normalization expectations (medium-term)
o U.S. volatility surrounding political developments could weaken USD

🧠 4. Market Sentiment Overview
• Short-Term: Strong USD demand keeps pair elevated; yen unable to capitalize even when USD dips.
• Medium-Term: Potential for corrective pullbacks if U.S. data weakens or if yen gains traction from rising JGB yields.
• Long-Term: Yield advantage still strongly on USD side, but yen may strengthen later in 2026 as BoJ normalization continues.