Forex analyst Haresh Menghani stated that the yen appears to be fragile near several month lows, but still struggles to attract buyers.

Due to concerns that the authorities will intervene in the market to support the domestic currency, the Japanese yen rose slightly during the Asian session on Wednesday, causing the US dollar to fall against the Japanese yen. However, due to expectations that the loss of a parliamentary majority by the ruling coalition in Japan may make it difficult for the Bank of Japan to further tighten monetary policy, there is a lack of confidence in the rise of the yen. In addition, optimistic market sentiment is seen as another factor that poses resistance to the safe haven yen.

Traders also seem unwilling to make aggressive bets and may choose to wait and see before the Bank of Japan's interest rate decision on Thursday. In addition, investors will also face important US macro data this week - the third quarter GDP report, Thursday's personal consumption expenditure (PCE) price index, and Friday's non farm payroll (NFP) report. This will play a key role in influencing the recent trend of the US dollar and provide some meaningful impetus for the US dollar against the Japanese yen.

From a technical perspective, the breakthrough of the US dollar against the Japanese yen last week at the 150.65 convergence point - including the 100 day moving average and the 50% Fibonacci retracement level that fell from July to September - is seen as a new trigger point for bulls. That is to say, if the exchange rate fails to attract buying this week or breaks through the 61.8% Fibonacci level, investors need to remain cautious. In addition, the relative strength index (RSI) on the daily chart is still close to the overbought area, so investors need to be cautious and wait for the recent consolidation or mild correction of the US dollar against the Japanese yen before preparing for further gains.

If the USD/JPY falls below the 153.00 level, it is possible to find some support near the overnight volatility low point, which is around the 152.75 area, as well as around the 152.40 area or weekly line. Some subsequent selling may drag the US dollar against the Japanese yen to the 152.00 level, and eventually fall towards the support level of 151.45 and the 151.00 level. If it continues to decline, the US dollar against the Japanese yen may challenge the 150.65 convergence resistance breakpoint, which should now become a key support level for the exchange rate.

On the other hand, the 153.85-153.90 region now seems to have become a strong direct resistance for the US dollar against the Japanese yen. If the USD/JPY continues to strengthen and breaks through the 154.00 level, it may push it to break through the resistance zone of 154.35-154.40 and return to the 155.00 psychological level. The exchange rate may eventually continue to rise, testing the high point of volatility at the end of July, around the 155.20 area.

USD/JPY daily chart