USD/JPY Long-Trend Setup
USD/JPY Long-Trend Setup: Why 148–150 Is Back on the Radar
The dollar-yen cross has snapped out of its early-summer drift and vaulted back above the 100-day simple moving average for the first time since February, reaching ¥147.19 on 9 July – a two-and-a-half-week high – as the greenback rides an upswing in U.S. yields and tariff-driven inflation fears. Reuters The technical breakout puts the familiar 148.00/150.00 band – the June swing high and the psychological round number – back in play for trend-followers over the next several sessions.
| Market & Bias | Live Quote* | Entry Plan (next 48-72 h) | Initial SL | TP-1 | TP-2 | Why it’s high-conviction | |
| USD/JPY – LONG trend-setup | 147.12 (Reuters) | Buy dips toward 146.50-146.60 (Asia low / 100-DMA) or a NY close > 147.40 | 145.8 | 148.80 (Jun peak) | 150.00 (Jan high re-test) | Policy gap stays wide: BoJ likely on hold amid tariff-hit economy, while Fed minutes should show “higher-for-longer” stance. Tech break above 100-DMA confirms fresh upside leg. |
1. Policy divergence as wide as ever
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Federal Reserve – higher-for-longer: Minutes from the June FOMC showed staff pushing inflation projections higher and flagging “upside risks” should tariff pass-through accelerate, reinforcing the market’s view that rate cuts will be pushed into Q4 at the earliest. Federal Reserve Five straight sessions of rising Treasury yields have followed, lifting the 10-year to 4.45 % and widening the U.S.–Japan real-rate gap.
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Bank of Japan – stuck on hold: Former BOJ board member Makoto Sakurai told Reuters the central bank will “wait at least until March 2026” before considering another hike, as Trump’s 25 % tariff on Japanese goods (effective 1 August) clouds the export outlook and will likely force the BOJ to cut its growth forecast at the 31 July Outlook Report. Reuters With headline CPI still only just above target and real wages contracting, the hurdle for tightening remains high.
2. Politics tilts the yen bearish
Market anxiety is also creeping in ahead of the 20 July House of Councilors election. Polling suggests Prime Minister Ishiba’s LDP-Komeito coalition could lose its majority, introducing fiscal-policy uncertainty just as trade negotiations with Washington stall. Wikipedia A weak mandate would make it harder for Tokyo to concede ground on rice or auto-tariff issues and risks a deeper clash – outcomes that historically pressure the yen.
3. Technical confirmation
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Structure: Tuesday’s daily close at ¥147.04 decisively cleared the 100-DMA (≈ 146.10) and invalidated a two-month descending channel.
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Momentum: Daily RSI is rising but still sits below 70, leaving room for extension.
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Targets: A measured move from the 143.00–146.90 rectangle projects to ≈ 148.80; beyond that, the January spike high at 150.00 marks the next magnet.
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Support: Intraday pullbacks should find buyers at 146.50–146.60 (Asian session low/100-DMA) and again at 145.80 (break-out retest).
4. Trade blueprint
| Action | Zone | Size | Rationale |
|---|---|---|---|
| Buy dip | 146.50-146.60 | ½ | Retest of breakout, tight risk. |
| Add | Daily close > 147.40 | ½ | Confirms upside momentum above prior intraday cap. |
| Stop | 145.80 | – | Below retest zone; invalidates breakout. |
| TP-1 | 148.80 | Scale 50 % | Pattern target / June high cluster. |
| TP-2 | 150.00 | Remainder | Round-number magnet, option strikes. |
Reward-to-risk ≈ 2.2:1 assuming 100-pip risk and 220-pip blended objective.
5. Risk factors to monitor
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FOMC minutes (9 July 18:00 BST): a surprisingly dovish tone could cap U.S. yields and force a pause; keep an eye on front-end rate pricing.
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Tariff headline volatility: Trump has toggled between “firm” and “flexible” deadlines; any genuine de-escalation would sap dollar haven demand.
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Japan CPI (19 July) & BOJ summaries: a sharp inflation beat could rekindle hike talk, though consensus sees a drift to 3.3 %.
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Election polls: A late swing back toward the LDP/Komeito super-majority would mitigate policy gridlock risk and support the yen.
Bottom line: With the Fed in wait-and-watch mode and the BOJ sidelined by tariff fallout and looming elections, the macro and technical backdrop align for a push toward 148.8–150.0. Traders should respect headline risk but, barring a sudden détente in the trade saga, dips in USD/JPY look primed to be bought rather than sold in the days ahead.
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