USD/JPY built on momentum to trade higher. Another round of rebound in USD, following market disappointment with Fed outcome was the latest trigger to fuel the upmove. Pair was last at 149.66, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Upside risks ahead

"Earlier, the upside surprise in Tokyo CPI and some political uncertainty (decline in approval rating for Ishiba’s cabinet per Jiji poll of 20.8% 2 weeks ago) were the catalysts.

"Daily momentum is mild bullish while the rise in RSI moderated. Upside risks ahead. Resistance at 149.70 (200 DMA, 50% fibo retracement of 2025 high to low), 151.70 (61.8% fibo). Support at 147.10/40 levels (21 DMA, 38.2% fibo), 145.60/70 levels (50, 100 DMAs)."

"Political uncertainty (referring to PM Ishiba’s political career/ LDP leadership), credit rating concerns (dependent on fiscal health) and carry allure remains supportive of USD/JPY while 'sell USD' trade momentum takes a back seat for now."