The USDJPY pair has reached the top of its recent range due to weak Japanese wage growth and negative trade news between the US and Japan, affecting the yen. The US dollar has stayed strong since last Thursday’s US Non-Farm Payroll report, which showed better results than expected and changed interest rate expectations to a more hawkish tone. Weak wage growth in Japan and ongoing US-Japan trade talks look unfavorable, potentially affecting hopes for a year-end rate hike by the Bank of Japan (BoJ). On the daily chart, USDJPY has risen to around 146.28, with buyers possibly pushing toward the 148.28 resistance level, which may attract sellers.

Market Dynamics

The 4-hour chart shows a range between support at 142.35 and resistance at 146.28. Here, sellers might step in with set risks above resistance, aiming for a drop toward the 144.35 area. On the 1-hour chart, a rising trendline indicates bullish momentum that buyers can use to push higher. Upcoming catalysts include US tariff letters and trade deals expected soon, along with US Jobless Claims data on Thursday, which could affect market trends. We are at a point in USDJPY action where it’s less about reacting and more about predicting. With Japan’s wage pressures barely rising and trade discussions affecting sentiment, the yen lacks support without a significant external boost. Following strong US labor data, the dollar seems well-positioned, suggesting that any near-term dips may be bought instead of sold.

Structural View

From a structural perspective, pushing above 146 indicates that this level, once seen as a peak, is now being tested as a base for stronger buying. Looking at the 4-hour chart, we’ve been moving in a narrow range, but the upper edge feels thinner. Sellers have likely been operating with risk just above that boundary, hoping for a drop to the lower mid-144s. However, this strategy now carries more risk. The hourly chart still shows a clear rising support line, suggesting buyers are ready to absorb small dips. The discussion on tariffs has its own timeline, but timing doesn’t always match chart patterns. We anticipate erratic responses to any policy decisions. Market reactions will focus more on the tone rather than the details, especially if any announcements suggest restrictions. Thursday’s jobless data doesn’t need to stray far from expectations to have an effect. Even minor differences could influence rate expectations, pushing short-term yields and impacting USDJPY. Sellers betting on a rejection at these highs must monitor volume and momentum indicators closely. If participation declines without a clear downside break, maintaining short positions becomes less appealing. Any dip that holds above the rising short-term line might quickly reverse. We expect that efforts to limit price action near 148 will likely face multiple tests. Significant reactions might not occur unless there’s a policy surprise—like an unexpected change in trade stance or a spike in the US economic outlook. Until then, upward pressure remains. Create your live VT Markets account and start trading now.

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