USD/JPY: Heading to a new year-to-date high

The USD/JPY has registered a new year-to-date high this week, with the pair surpassing the 145.00-145.80 range, where the BoJ had intervened with US$19.7 billion of yen-buying back in September 2022. That has prompted speculations of more intervention, although any excitement could easily die down without the lack of any concrete follow-through.

Having traded in an upward channel since the start of the year, further Federal Reserve-Bank of Japan (Fed-BoJ) policy divergence displayed this week may leave a retest of the 150.00 level in sight, as a key resistance to overcome. This is where the upper channel trendline resides, while it also marks a key psychological level where the BoJ intervened with a larger US$42.4 billion worth of yen-buying in October 2022, which triggered the formation of a near-term top for the USD/JPY.

On the downside, the 145.80 level will serve as an immediate support level to hold. Staying above its Ichimoku cloud pattern and various moving averages (MA) on the daily chart still leaves an upward trend intact for the pair, although recent lower highs on relative strength index (RSI) may point to some near-term exhaustion/indecision for now.