USD/JPY Bulls Eye 144 Handle Amid Improving Risk Tone; Yen Longs Face Key Test
Technical Analysis:
USD/JPY advanced to a session high at 143.35 on firmer U.S. Treasury yields and improving risk sentiment, following U.S. Treasury Secretary Bessent’s supportive remarks on the dollar and reduced fears of aggressive tariff hikes. The pair now trades in the middle of its recent 141.54–143.21 range, attempting to stabilize after a period of sustained downward pressure driven by record yen long positions among asset managers. Technically, the pair’s decisive move back above the critical 200-hour moving average at 142.26 provides short-term bullish confirmation, signaling a potential shift in momentum.
Stochastics are now pointing higher after USD/JPY successfully broke a series of lower highs, reflecting emerging bullish momentum and opening the path toward a key resistance test near the 144 psychological barrier. To solidify this bullish reversal, traders must see a clear break and sustained close above critical technical hurdles at 143.99–144.00—the April 9–10 lows—and more significantly at 144.55, the April 4 high. Such a break could prompt a rapid short-covering rally, placing substantial pressure on existing yen long positions established below these resistance levels.
Conversely, downside risks remain well-defined. Immediate support is clearly located at the April 21 low of 140.48, closely followed by the year-to-date low at 139.89. A sustained breach of these supports would significantly undermine the bullish case and resume bearish momentum toward deeper technical support at 139.58, the September 16 low. While risk sentiment has improved recently, upcoming U.S.–Japan finance discussions and next week’s Bank of Japan meeting present meaningful event risks, warranting caution for traders looking to initiate fresh bullish positions.