USD/JPY Bulls Face Long-Term Concerns Amidst Short-Term Gains

The USD/JPY currency pair has shown a clear bullish trend in its short-term charts over the past two weeks, despite concerns about potential intervention from policymakers. The pair's recent bounce from the 155.00 handle around FOMC and BoJ rate decisions last week has created a clean structure with higher-highs and lows.

However, on longer-term charts, there are questions about where the next line-in-the-sand might be, particularly as the 160.00 level approaches. The larger facet of carry unwind is also a concern, as it would require fundamental convergence between the two economies, which does not appear imminent.

The past two weeks have seen support delivered from the five-year trendline in the pair, but a clear change of pace has been evident on weekly charts since Scott Bessent and the Japanese Finance Ministry intervened almost two months ago. Significant Yen weakness is unlikely to be tolerated beyond the 164.00 level, where a prior intervention occurred.