USD/JPY Facing One Last Obstacle Before Heading for 150 Again

USD/JPY made quite a steep bearish reversal in the second week of November after being positive for the majority of last year and plummeted to 140 lows by the end of 2023. The reason for this was a signal that the Bank of Japan (BOJ) gave to the markets about a policy shift in December. But this pair is trading 7 cents higher now, heading back to 150, however it has one last obstacle to overcome.

The BOJ disappointed expectations once again and killed the hype for the JPY by maintaining the policy intact and driving this pair above 147 yesterday. While it is true that USD buyers have staged a comeback in the first three weeks of this year, the scope of the increase in the USD is not close to the 7 cents that we have seen in the JPY.

USD/JPY Daily Chart – Buyers Testing the 100 SMA

Some analysts were expecting the rally to stall in the 146-147 area, but the bullish momentum continued and this pair pushed above 147, as The BoJ’s risk for buyers appears to be limited for the time being, while the rise of uncertainties from geopolitical tensions may also support USD/JPY .

Yesterday, this forex pair gained further momentum as it approached the 100 SMA (green) on the daily chart which coincides with the 61.8% retracement level for the decline from the top at 152 to the bottom at 140 lows. There’s a chance that we might see a retreat from this moving average, following the current rising rise.

Yesterday FED member Christopher Waller popped up, making some hawkish comments, which gave the USD another boost. He was the one to signal rate cuts in November which turned the USD bearish, so yesterday’s comments from him had a strong impact on the USD. As a result, the USD jumped up and closed the day near the highs, while USD/JPY pushed above the 50 daily SMA (yellow) and surged around 150 pips. However the surge stopped right at the 100 SMA, so let’s see if buyers can push above this moving average today.

USD/JPY Live Chart