155.00: Why the Japanese Yen just broke through the level that could define a new range
USD/JPY has suffered a sharp technical breakdown below the key 155.00 psychological threshold, extending losses toward 153.00 amid thin holiday liquidity, unwinding carry trade positions, and renewed political focus on Japan's monetary framework.
On 7 September, the Japanese Yen (JPY) breached the psychologically significant level of 155.00 against the US Dollar (USD), sparking concern among market participants. This technical breakdown was fueled by a lack of liquidity, unwinding of carry trade positions, and heightened focus on Japan's monetary policies. Analysts noted that the move primarily stemmed from idiosyncratic JPY dynamics rather than a collapse in US Dollar sentiment.
The breach of 155.00 might establish a new lower trading range for USD/JPY, with near-term support levels at 152.00 and 150.00. Comments from US Treasury Secretary Scott Bessent further encouraged unwinding of positions, suggesting Japan reconsider its reflationary policies. Technical indicators, such as the 38.2% retracement of its rise, were also breached, indicating a potential shift into a new range where 155.00 could act as the upper boundary.
While some market observers believe the move may be overdone, the risk of further carry trade unwinding remains, which could push the pair towards critical support levels at 152.0 and 150.0.
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