The USD/JPY pair recorded a sharp decline of about 1.4% as renewed fears of possible intervention by Japanese authorities unsettled the market. Adding to the downside was widespread weakness in the US Dollar, driven by subdued risk appetite and mixed macroeconomic data from the United States. On the policy front, the Bank of Japan left its benchmark interest rate unchanged at 0.75%, but its accompanying commentary leaned cautiously hawkish. This stance signals that while the central bank remains accommodative, it is increasingly attentive to inflation risks. Together, these factors continue to shape short-term sentiment and directional bias for the pair.
Key Price Levels to Watch
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Resistance Zones: 159, 160, 161
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Support Zones: 155, 150, 145
Price Slides as Bears Retain Control
The 156 region, which served as a notable support area during the latter half of December, briefly attracted buying interest during the recent selloff. However, bearish momentum proved dominant, forcing price lower toward the 155 level. The presence of a modest lower wick on the daily candlestick indicates that buyers are beginning to show interest around this zone. Should this area continue to attract demand, the USD/JPY market may attempt a short-term corrective bounce.
Short-Term Outlook (4-Hour Chart)
On the 4-hour timeframe, the aggressive decline has significantly expanded market volatility, with price pushing beyond the lower Bollinger Band. Such conditions often suggest short-term exhaustion in selling pressure. As a result, sellers may become more cautious at current levels, especially around the 155 support zone, where a technical rebound remains a growing possibility.
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