USD/JPY has fallen sharply on intervention threats, raising the question of whether the pair has topped out after the recent sell-off. If so, yields could begin to slow again, potentially adding further pressure on the U.S. dollar. From a technical perspective, USD/JPY may have completed its fifth wave within an ending diagonal (wedge) pattern, suggesting a possible shift to the downside. The pair could now be turning lower within at least a three-wave A/1–B/2–C/3 decline. In the near term, a period of stabilization and corrective recovery in wave B/2 is possible, with price potentially revisiting the 157–159 resistance zone. However, this rebound may prove temporary, as the broader outlook favors a continuation lower into wave C or 3.
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