The Japanese yen gave up most of its intraday gains against the US dollar, pushing the US dollar against the Japanese yen back to near the 149.00 median during Tuesday's European trading session. Earlier on Tuesday, data released by Japan showed that the unemployment rate unexpectedly rose and corporate capital expenditures fell for the first time in three years, which in turn drove some yen selling.

However, after the hawkish sentiment surrounding the policy outlook of the Bank of Japan, any meaningful depreciation of the yen still seems elusive. In addition, risk aversion and the threat of US President Trump's devaluation of the Japanese currency should benefit the yen. It is cautious to wait for some follow-up buying before confirming that the US dollar has formed a recent bottom against the Japanese yen.

From a technical perspective, the overnight failure near the support level of 151.00 has now become a resistance level, confirming the bearish outlook for the US dollar against the Japanese yen in the near future. In addition, the oscillation indicators on the daily chart remain stable in the negative area and are still far away from the oversold zone. This in turn supports the prospect of the currency pair continuing its established downward trend over the past two months or so. Therefore, it seems very likely that there will be some subsequent weakness below the median of 148.00, moving towards the next relevant support level near the 148.00 integer. The downward trajectory may further extend towards the 147.35-147.30 area until reaching the 147.00 checkpoint.

On the other hand, the 149.65-149.70 area now appears to be a direct obstacle before the psychological threshold of 150.00. Any further increase could be seen as a selling opportunity near the 150.60 zone, which should limit the USD/JPY exchange rate to the key barrier of 150.90-151.00. The latter should become a key point, and if decisively cleared, it may prompt short covering, rising to the intermediate barrier of 151.40-115.45, moving towards the 152.00 integer and 152.35 regions or the very important 200 day simple moving average (SMA).