USD/JPY held firm on Wednesday but eased from its day’s high of 153.19 as a decline in U.S. shares triggered some haven-related yen buying. The pair remains supported by rising U.S. Treasury yields, which continue to limit losses for the dollar. Volatility has also risen across tenors, driven by increasing demand for longer-dated topside options, signaling continued interest in a higher USD/JPY. However, technical resistance near the 61.8% Fibonacci retracement level at 153.41 and the upper Bollinger Band at 153.56 is slowing the pair’s ascent towards the psychological 154.00 mark.
Technically, USD/JPY remains in bullish territory after breaking through the key 152.00 level, but indicators are starting to flash overbought conditions. The 14-day RSI is approaching overbought levels, suggesting that the pair may be due for a pullback or consolidation before attempting to break higher. Immediate resistance lies at 153.41 (61.8% Fibonacci retracement of the year’s high to low) and 153.56 (the top of the 20-day Bollinger Band). Should these levels hold, USD/JPY may struggle to make a significant move higher without a fresh catalyst, such as rising Treasury yields or more dovish rhetoric from the Bank of Japan (BOJ).
On the downside, key support lies at 152.00, a psychological level, followed by the 200-day moving average (DMA) at 151.38 and the Ichimoku cloud top at 150.70. Any break below 152.00 could see USD/JPY retrace toward these levels, especially if BOJ Governor Kazuo Ueda’s speech at the IMF/World Bank meeting provides any hints of policy tightening or rising inflation concerns. Traders will also closely watch Tokyo’s October CPI reading due on Friday, which could provide further insight into Japan’s inflation trajectory and its impact on BOJ policy. For now, the broader trend remains bullish, but overbought technicals suggest caution is warranted in the near term.