Alex Bobrov
⬤ USD/JPY pushed higher during European trading, climbing back to the 61.8% Fibonacci retracement of its recent drop and breaking back into the daily Ichimoku cloud—a sign that bulls are regaining control. The yen's been getting hit from all sides as political developments have made near-term intervention from Japanese authorities look less likely.
⬤ The charts show USD/JPY has pulled itself back above the 155.65–155.77 zone, right where the daily Ichimoku cloud and key short-term moving averages sit. It's now hovering around 156.40–156.50, with momentum picking up on both the 4-hour and daily charts. This bounce comes after a sharp selloff from January's highs near 159.20. That 61.8% retracement level is proving to be a solid support point, giving the bulls something to lean on.
⬤ The yen's losing ground largely because traders are pricing in a big election win for Takaichi's Liberal Democratic Party, which would likely mean more loose fiscal policy down the road. On top of that, the Bank of Japan doesn't seem interested in stepping into the bond market anytime soon, which is adding to the pressure on the currency.
⬤ This isn't just about one currency pair—USD/JPY sits right at the crossroads of political expectations, central bank credibility, and technical patterns. If the pair dips back toward 155.65–155.70, buyers will probably step in. But things could shift fast after the weekend. If the election results match what the polls are showing, markets might start watching closely for any hint of actual intervention, especially if the yen keeps sliding.
Alex Bobrov
