The USDJPY pair has been influenced by volatile movements in U.S. stocks and bond yields, affected by changing risk sentiment and geopolitical news. After a rise due to the Trump tariff delay, it encountered resistance near the 148.11 level, failing to surpass the significant moving average range of 148.65 to 148.75.
In recent trading, as U.S. stocks dropped sharply, the USDJPY also declined. The Dow fell by 520 points, the S&P decreased by 94 points, and the Nasdaq dropped by 400 points, coinciding with a decline in Treasury yields.
Breaching Critical Support Zones
The USDJPY has breached a critical support zone between 147.20 and 147.33, as well as the swing level at 146.53. To regain control, buyers must re-establish these levels.
Technical support remains limited until reaching the 144.45–144.56 area and the weekly low at 143.99. Price movements remain influenced by headlines, and sellers are in a strong position as long as prices stay below the converging moving averages, with a break below 144.45 potentially intensifying bearish pressure.
As we’ve seen, the pair slipped past the lower barrier of 147.20 to 147.33, and then through the former reaction low set at 146.53. These lower levels, previously acting as a floor for price recovery attempts, have quickly turned into areas of resistance. Buyers had made several efforts to hold ground there, suggesting that their hand has weakened appreciably. From here, unless they manage to reclaim those now-lost levels, any short-term bounces are likely to be met with renewed selling.
This kind of technical break doesn’t occur in a vacuum. When we couple it with sharp drawdowns across U.S. equities—Dow down 520 points, Nasdaq losing 400 and the S&P shedding 94—it points to a broader unwinding of risk positions. Add falling Treasury yields to that mix, and the conclusion is unambiguous: risk aversion is pressing higher, not fading.
Tracking Momentum Driven Activity
There’s little in the way of dependable support until prices approach the 144.45 to 144.56 band, the bulk of which lies close to that recent weekly low at 143.99. This means that momentum traders and systematic flows alike may now begin targeting that range. If selling extends beyond there, the possibility of acceleration increases. We could see automated models add to their positions once those levels are breached.
Price movement is being led more by developments in macro headlines and shifts in outlooks for broader financial conditions than by isolated technical patterns. News that affects the bond market tends to ripple through to FX rather sharply. What we’re observing aligns clearly with that dynamic: lower equity prices, falling yields, and Japanese yen strength.
From a practical perspective, any push toward 145.00 that lacks conviction will likely spur more offers. Bouyed attempts would need to be forceful, persistent, and aligned with clear change in fixed-income flows to start shifting the outlook from tactical to constructive. For the moment, sellers remain in possession as long as the rate holds beneath the clustered moving averages that capped price at 148.65 and 148.75—a region that forced that recent retreat.
We should continue tracking momentum-driven activity. There may be short-lived recoveries, but none hold much promise unless they are supported by a change in Treasury yield direction. Right now, the path of least resistance is downward, and until there’s adequate evidence of positioning exhaustion or a decisive shift in debt markets, that’s where attention should remain.
