USDJPY is flirting with 2 decades-long resistance. Bank of Japan’s extra loose policy and promise of more stimulus if necessary while FED’s tightening cause a massive shift in the price since the start of the year. On the other hand, the finance minister Suzuki is not happy about the situation. Suzuki said that “the government will closely monitor the developments in the foreign exchange market, including the recent depreciation of the Yen with a sense of vigilance”. The comment made it pause a little but the bulls are still in control.
126 is a massive resistance that is holding since the early 2000s. Because of that, a clean break is unlikely. A cup and handle pattern forming is a possibility and perhaps will be more healthy for bullish moves. A clean break with panic selling of Yen might cause BOJ to act differently, making USDJPY into a whipsaw mode.
For down moves, extension below 120 is highly unlikely for the medium-term unless BOJ changes its stance.
