USDJPY is currently sitting at a key support zone around 142.80–143.00, showing signs of a potential bullish reversal. This support area has previously acted as a strong launchpad for price rallies.
🟢 Technical Setup:
Price action has formed a clean higher low structure, bouncing off horizontal support.
The US10Y Treasury Yield (pink line) has rebounded sharply and is diverging to the upside — a leading indicator for USDJPY strength.
The Fib retracement from the last swing move aligns well with the 0% zone, suggesting the dip might be complete.
A bullish reaction from here targets the 148.50 zone, with intermediate resistance around 145.00–146.00.
🟠 Risk Levels:
Invalidated below 141.40 (structure break).
Stops could be placed below 142.00, targeting a 2:1 or better risk-reward ratio.
Macro-Fundamental Insight:
U.S. Yields are firming despite mixed Fed signals — this gives strength to USD, especially against low-yielders like the JPY.
BOJ remains dovish with no urgency to normalize rates, keeping the yen weak.
With risk appetite improving and bond yields lifting, carry trade dynamics favor USDJPY upside.
Conclusion:
As long as US10Y yields remain firm and USD holds above 142.00, USDJPY has a strong probability of rallying toward 148.50. Look for confirmation with higher highs on the 4H chart and continued divergence between yield and price.