USD/JPY Support Holds as Inflation Expectations Weigh on Bulls

The USD/JPY currency pair has been experiencing a dichotomous backdrop, reflecting both short-term and long-term trends. On shorter-term charts, bulls have continued to push in after pullbacks, while longer-term charts illustrate a shift into a more bearish environment.

Last week saw the resistance test at 159, leading to a pullback to support level 156.68, which gave a bounce of over 100 pips yesterday but didn't propel further gains.

The weekly chart shows a clear push-pull dynamic in the USD/JPY pair, with similar shifts occurring in 2022, 2023, and 2024 due to weakening inflation expectations. The recent dual intervention from the U.S. and Japan has contributed to this trend.