The USDJPY pair moved to the top of its recent range due to soft Japanese wage growth figures and unfavourable US-Japan trade news, affecting the yen. The US dollar has remained buoyant since last Thursday’s US Non-Farm Payroll report, which showed better-than-expected data and led to a hawkish shift in interest rate expectations.

Disappointing wage growth figures in Japan and US-Japan trade negotiations appear unfavourable, potentially impacting hopes for a year-end rate hike by the BoJ. On the daily chart, USDJPY has climbed to the top of the range around 146.28, with buyers likely pushing towards 148.28 resistance, prompting potential seller intervention at this level.

Market Dynamics

The 4-hour chart reveals a range between 142.35 support and 146.28 resistance, where sellers may step in with defined risks above resistance to aim for a drop into the 144.35 zone. On the 1-hour chart, an upward trendline signifies bullish momentum, which buyers might utilise to push higher.

The upcoming catalysts include US tariff letters and trade deals expected soon, alongside US Jobless Claims figures on Thursday, which could influence market dynamics.

We’re now reaching a point in USDJPY action where positioning becomes less about reacting and more about anticipation. With wage pressures in Japan showing barely any lift and bilateral trade noise weighing on sentiment, the yen has little reason to garner support without an external jolt. Following the recent upside momentum pressed by strong US labour data, the dollar has dug in, suggesting near-term pullbacks may be bought rather than sold.

Structural View

From a structural view, the daily push above 146 signals that this level—once an upper limit—is being tested as a base for more buying conviction. Peeling back to the 4-hour timescale, we’ve been moving in a tight corridor, but the upper edge is beginning to feel thin. Sellers have likely been operating with well-placed risk just above that line, eyeing a rotation back into the lower mid-144s. But this strategy now carries greater exposure. With the hourly chart still respecting a clearly rising support line, pockets of demand appear ready to soak up modest dips.

The discussion over tariffs has its own timeline, but timing doesn’t always align well with chart setups. We expect noise around any policy decisions to be erratic. Market reactions will hinge more on tone than on substance, especially if language used in letters or public statements points to anything restrictive. On the labour front, Thursday’s jobless data won’t have to be wildly different from consensus to have an impact. Even small deviations could skew rate expectations further, pushing short-term yields and thereby nudging USDJPY alongside.

Right now, sellers betting on rejection from these upper levels must closely track both volume and momentum indicators—if participation wanes without a clear downside break, holding onto intraday shorts becomes less appealing. Any dip held above that same rising short-term line may quickly find itself reversed.

We’re approaching this zone with the view that attempts to cap price action near 148 will likely face multiple retests. Stronger reactions may not emerge unless we see a policy surprise—either an unexpected stance shift on trade or a surge in the US macro snapshot. Without such events, pressure remains up.

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