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This year, the JPY hits new lows across the board even though BOJ decided to end its ultra-loose policy, by raising rates for 10bp in March. But what's also technically important is that USDJPY broke higher, into a fifth wave of a higher degree wave III that is now at 1990 resistance. From an Elliott wave perspective we also see a potential wedge formation, but shows room for C subwave to complete the pattern with fifth wave up at 162-164 resistance.

Even if we consider an ongoing impulsive five-wave bullish cycle within an extended 5th wave regarding second count, there's still a chance it's finishing subwave 5 of III that can cause a new, higher degree corrective retracement in wave IV back to around 155 support area.

All that being said, despite lower and bearish yields, JPY keeps trading lower, but as soon as yields face a bearish continuation, we believe that JPY will recover again, especially because of BOJ that keeps mentioning potential interventions in the FX market.

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