The Japanese yen strengthened on Monday, pushing the USD/JPY pair below the ¥152 mark. The move can be seen as a market reaction to U.S. President Donald Trump’s visit to Japan, where he met with the newly elected Prime Minister, Sanae Takaichi.
During the visit, the two leaders proclaimed a “new golden era” in U.S.–Japan relations and signed:
→ an official trade agreement introducing a 15% tariff on Japanese exports;
→ a deal on the supply of rare earth metals.
According to several media reports, Sanae Takaichi plans to nominate Donald Trump for the Nobel Peace Prize and invest around $550 billion in the U.S. economy.
Applying a regression channel from the key low recorded on 17 September reveals a clear upward structure, which effectively illustrates major price movements (marked with arrows):
1 & 3 → rebounds from the lower boundary of the channel;
2 → reversal from the upper boundary;
4 → a consolidation phase near the median line, where supply and demand are balanced.
The latest decline from the median can be viewed as a sign of shifting sentiment, suggesting that sellers may now target the lower boundary of this channel. However:
→ the 151.50 level represents a notable support zone, having held firm on 21–22 October;
→ bearish conviction is also reinforced by the pair’s repeated failure to close above ¥153, forming what appears to be a Double Top pattern.
Whether the pair will reach the lower edge of the regression channel largely depends on the broader fundamental backdrop:
→ Trump’s international tour continues, with traders awaiting his meeting with China’s leadership;
→ this week’s key events include interest rate decisions from the Federal Reserve on Wednesday and the Bank of Japan on Thursday — the latter drawing particular attention given the recent change in Japan’s leadership.
These developments could significantly shift sentiment in the USD/JPY market — traders should be prepared for potential spikes in volatility.
