USD/JPY Long Trade SetupBuy dips - 146.50-146.60
Stop Loss -145.80 - Below retest zone; invalidates breakout.
TP-1 148.80 - Scale 50 % Pattern target / June high cluster.
TP-2 150.00 - Round-number magnet, option strikes.
Rationale
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. 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.
Policy divergence as wide as ever
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. 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.
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. With headline CPI still only just above target and real wages contracting.
