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Bullish and Bearish Forces in Tug-of-War
Forex
Summary:
Fundamentally, both bullish and bearish factors are present, leading to a phase of market contention in the short term. However, the technical outlook remains within an upward channel, suggesting a higher probability of near-term upside.
Buy
CLOSEDUSDJPY
End Time
147.965
Entry Price
151.100
TP
146.200
SL
147.376 -0.270 -0.18%
9
Points
Profit
146.200
SL
147.974
CLOSING
147.965
Entry Price
151.100
TP
Fundamentals
Recently, USDJPY movements have been driven by three key factors:
Firstly, Japanese political uncertainty. The unexpected resignation of the Prime Minister and the ensuing LDP leadership transition have raised concerns over fiscal and monetary policy direction. This has temporarily weakened the yen's safe-haven appeal, putting downward pressure on the currency and driving USDJPY higher.
Secondly, gradual signals of monetary policy normalization from the Bank of Japan (BoJ). Officials have hinted at entering the "final phase" of balance sheet reduction and ETF sales. If implemented, this would be structurally bullish for the yen over the long term, though the timing and pace remain subject to political variables.
Thirdly, U.S. Treasury yields and Fed outlook. The 10-year U.S. yield has recently hovered around 4.08%, while shifting market expectations for Fed rate cuts have heightened volatility in short-term rates and dollar sentiment. A further decline in yields could weigh on the USD and support JPY against non-USD crosses.
In summary, the yen faces near-term weakness due to political shocks. However, confirmation of the BoJ's normalization path could become a critical headwind for the mid-term gains of USDJPY. Concurrently, synchronized moves in U.S. yields and the DXY may amplify directional breaks in either direction.
Technical Analysis
On the daily chart, USDJPY's recent price action shows a sequence of successively higher highs and lows, tracing out a well-defined ascending channel. This configuration implies that the near-term bias remains tilted to the upside. Within the moving-average complex, the short-term stack is aligned in a bullish sequence and the SMA144 is curling higher, reinforcing near-term upside momentum.
On the upside, USDJPY is confronted with a critical resistance at 149.00. A forceful breakout and sustained close above this level would open extension room for further upside, targeting the prior high of 150.90 and, subsequently, the upper bound of the ascending channel.
Downside risks emerge on a decisive breach of the 147.10 support. Such a move would expose the next cushion at 146.30. A break below 146.30 would confirm a bearish trend reversal in the near term.
Trading Recommendations
Trading Direction: Buy
Entry Price: 147.80
Target Price: 151.10
Stop Loss: 146.20
Valid Until: September 25, 2025, 23:00:00
Support: 147.10/146.30
Resistance: 146.13/150.90
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