USD/JPY Climbs Toward 145—Will It Break Through and Retest the 148.60 Peak?

USD/JPY Enters Tug-of-War Zone as 144.00 Acts as Technical Battleground

The USD/JPY pair has entered a pivotal zone after recovering from a critical low of 142.10, with price action now pressing against the 144.00 resistance barrier. The pair has rebounded from a falling trendline, confirming short-term support but struggling to break through the 20-day SMA at 144.80. This price action reflects investor hesitation amid mixed signals from both the U.S. and Japanese macroeconomic landscape. The candlestick structure has printed a doji, and the RSI floats near 50—both classic signs of indecision at an inflection point.

Bond Yield Shocks in Japan Reignite Yen Demand but Policy Tweaks Add Confusion

A major catalyst affecting USD/JPY recently has been the surge in Japanese Government Bond yields. The 10-year JGBs jumped to 1.52%, a move sparked by the Ministry of Finance’s plan to slash super-long bond issuance. This caused temporary repatriation-driven strength in the Yen, dampening the bullish momentum for USD/JPY. However, the situation shifted again as the Japanese bond market cooled off and yields declined sharply. The government’s intervention, aimed at preventing further yield surges after a weak 20-year auction, temporarily capped the Yen’s strength. Despite BoJ Governor Ueda signaling caution over rising food prices and inflation, the central bank remains in ultra-loose policy mode—undermining sustainable Yen strength.

USD Regains Ground on Strong Consumer Data and Delayed Tariffs

Support for the U.S. dollar has come from stronger-than-expected consumer confidence data, with sentiment hitting a four-year high. The DXY index bounced off the 98.98 Fibonacci support zone, clawing back ground to 99.50. This resurgence helped lift USD/JPY back toward the 144 zone. Trump's announcement to delay steeper EU tariffs until July 9th has also helped ease global trade tension fears, adding to bullish sentiment around the dollar and suppressing safe-haven flows into the Yen. However, the relief may prove short-lived if the FOMC meeting minutes signal dovish undercurrents.

Fed Minutes in Focus: Will Powell Confirm Soft-Landing or Reignite Rate Cut Bets?

The upcoming FOMC minutes loom large for USD/JPY. The Fed's decision to hold rates again has not clarified the path forward, especially with inflation moderating but still sticky. Markets want to know if Powell leans toward further tightening or tilts dovish. Any indication of prolonged high rates could re-strengthen the dollar and lift USD/JPY above 145.00, targeting the May 2 high at 146.00 and potentially 148.32 beyond that. Conversely, dovish language could invalidate the current bounce and send the pair toward 142.00, then deeper to 139.80 or even the 2025 low near 138.70.

Technical Landscape: Bulls and Bears Grapple for Direction as Triangle Break Looms

From a chart perspective, USD/JPY is coiled inside a broader descending triangle pattern. A break above 145.00 confirms a bullish continuation targeting 146.00 and the critical zone at 148.60, last seen on March 28. If this zone is breached, 150.00 becomes the psychological milestone, and then 151.21 (March high) enters play. On the flip side, if the pair fails to clear 144.80 and retreats, eyes turn to 142.42—the May 7 low. A breakdown below 142 would expose 139.90 (April 22 low) and eventually the July 2023 low at 137.25.

The RSI bouncing between 40–60 and the struggle near the 20-day EMA shows that USD/JPY remains in a congested state, with no strong directional signal yet confirmed.

Macro-Technical Crosscurrents Cloud USD/JPY Trajectory—but Bias Tilts Cautiously Bullish

While the long-term bearish channel remains intact, short-term momentum favors the bulls unless 142.00 breaks convincingly. BoJ’s yield management and Fed’s policy messaging will define whether USD/JPY resumes its uptrend or falls back toward mid-130s. With inflation softening in the U.S., Japan’s muted tightening stance, and the dollar supported by robust sentiment data, the current environment slightly tilts in favor of USD/JPY pushing higher.

Verdict: BUY USD/JPY on Break of 145.00 with Target at 148.60—Watch 142.00 as Stop-Line

All current data points to a tactical Buy bias on USD/JPY as long as the pair holds above 142.00. A break through 145.00 would validate bullish strength and re-open the path toward 148.60, with potential extension to 151.21. A drop below 142.00 invalidates this thesis and would suggest renewed bearish momentum driven by repatriation flows or a dovish Fed turn.

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