USD/JPY loses ground for the second successive day, trading around 157.10 during Asian hours on Wednesday. The currency pair is moving sideways within a symmetrical triangle, which indicates a consolidation phase where buyers and sellers are in temporary equilibrium, pointing to an impending volatility expansion once price breaks out above resistance or below support.
The USD/JPY pair is keeping a bearish near-term tone as it holds below both the nine-period and 50-period Exponential Moving Averages (EMAs). The alignment of price under these short- and medium-term EMAs suggests upside attempts remain capped, even as the 14-period Relative Strength Index (RSI) sits near the neutral band around 49, hinting at consolidation rather than a decisive trend reversal.
The USD/JPY pair could test the immediate barrier at the nine-day EMA of 157.22, followed by the 50-day EMA of 157.98. Further resistance lies at the upper boundary of the symmetrical triangle around 158.80. A successful break above the triangle would cause a bullish revival and support the pair to explore the region around a nearly 40-year high of 163.99, which was reached on July 23.
On the downside, the USD/JPY pair may target the lower boundary of the symmetrical triangle around 155.60. A successful break below the triangle would put downward pressure on the pair to test the 11-month low of 152.10.
Japan signals readiness to step in as Yen support message intensifies
Analysts at MUFG/BTMU highlight that the latest rhetoric from policymakers reinforces the sense of growing resolve in Tokyo, noting that "overall, the comments from Japanese officials at the start of this week continue to send a strong signal that Japan is prepared to intervene against to support the yen." They argue that the consistency and tone of official remarks underscore a clear willingness to act if currency weakness becomes excessive.
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