USD/JPY Rises on Tariff Uncertainty but Faces Key Technical Barriers
USD/JPY edged higher on Friday, settling near the top of its 154.93-155.23 range as tariff uncertainty lifted the dollar. A White House spokeswoman confirmed that President Trump will implement new tariffs on Saturday, contradicting earlier reports of a likely March 1 implementation. This conflicting information fueled risk aversion and dollar demand, helping USD/JPY hold above key technical supports. However, despite the pair’s gains, a descending trendline from January highs and resistance near 156.30 remain formidable barriers.
Technically, USD/JPY remains within a consolidative pattern. The cloud bottom at 154.50 serves as immediate support, with further downside protection near the Jan. 17 double-bottom at 153.77-153.79. On the upside, resistance lies at the descending trendline near 156.00, with a break above required to shift momentum in favor of the bulls. The pair continues to post lower highs below 156, indicating lingering selling pressure. Additionally, $760 million in 154.10 options expiring on Feb. 28 could exert influence on price action in the coming weeks.
Market positioning and volatility trends highlight mixed sentiment. While open interest in USD/JPY futures has reached a two-month high, the lack of a strong directional bias suggests cautious positioning. One-year risk reversals remain the most bearish since November, reflecting concerns over BOJ rate hikes and Fed policy risks. The relationship between USD/JPY and gold or Treasury yields is improving but remains insignificant. Heading into next week, U.S. jobs data and further tariff developments will be key catalysts, with a break above 156 or below 154 needed to establish a new directional trend.