USDJPY Analysis – 28th May
A two-day rebound in USD/JPY—initiated by Japan’s plan to tame super-long JGB yields and a brief risk-on lift from Trump’s tariff 50% delay on the EU—has pushed the pair back into a well-defined supply zone but has not altered the broader bearish constellation:
Macro divergence: the Bank of Japan (BoJ) still hints at additional rate hikes, while the Fed’s baseline remains two cuts in 2025; U.S. fiscal concerns add a structural head-wind to the dollar.
Yield mechanics: trimming super-long JGB issuance paused the yield surge, yet official comments suggest the MOF and BoJ will be “vigilant” rather than permanently suppressive—limiting how far yen weakness can travel.
Technical context: price has reclaimed 143.00 and tested 144.50-145.20 (old breakdown shelf-plus-50 % Fibo). Daily momentum remains negative and the rally has printed a textbook corrective “morning-star” inside a larger down-channel.
Against that backdrop, we retain a short-bias trade but refine entry precision to catch renewed downside while keeping the stop safely above invalidation.
| Pair / Direction | Entry Plan | Stop-loss | Targets | Rationale |
| USD/JPY – SHORT | 144.50 – 145.20 Fade strength: scale-in 144.50 to 145.20 (half-size around the monthly pivot 144.40, second half at 145.00-145.20 50 % Fibo).Momentum break: full-size short on a 4-h close < 143.00 (trend-line re-capture). | 145.60 (above 50 % Fibo & supply shelf) | TP1 – 142.10 TP2 – 141.00 TP3 – 139.60 | Macro: BoJ still tilted to more hikes; MOF prepared to curb long-dated JGB yields, signalling official discomfort with higher rates. Fed seen cutting in ’25, deficit fears linger—keeps medium-term USD headwind. Flow: Tuesday’s risk-on and upbeat US data produced only a shallow yen dip; geopolitical overhang (Ukraine, Gaza) caps JPY downside. Technical: Monday-Tuesday rebound stalled under 145.0 (psych / 50 % Fibo). Daily oscillators remain in their bear zone despite the 3-candle “morning-star” bounce; broader channel trend still down. A push through 145.6 invalidates the short idea, while a slide back under 143.0 signals the corrective rally is spent. |
Key Take-away: the recent bounce has delivered better pricing to re-engage the prevailing down-trend. A decisive slip back beneath 143.75 should re-energize yen strength toward 141-handle supports, while a push through 145.60 nullifies the setup. Manage size in front of this week’s data gauntlet and trail stops once T1 is printed.
Check similar High-Conviction Trade Ideas on our forex page.
Please visit our Disclaimer page.
Disclaimer
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets.
You should do your own thorough research or engage the services of a registered financial markets professional before making any investment decisions.
TerraBullMarkets.com does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets or any financial instrument involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress.
All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TerraBullMarkets.com nor any of its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from TerraBullMarkets.com.
TerraBullMarkets.com and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. TerraBullMarkets.com and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and TerraBullMarkets.com are not registered investment advisors and nothing in this article is intended to be investment advice.
