USD/JPY: Nearing overbought conditions – OCBC

USD/JPY rose amid rise in UST yields, tariff implications, sell-off in longer-dated JGBs and upper house election uncertainty. USD/JPY was last at 147.69 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Bullish momentum on daily chart intact

"Struggle in the upper house has resulted in pledges of spending hikes and tax cuts in attempt to shore up votes. Moody’s has earlier warned that election results may impact fiscal health and ratings. Bullish momentum on daily chart intact while rise in RSI shows tentative signs of turning near overbought conditions."

"Next resistance at 148.20, 149.40/70 levels (200 DMA, 50% fibo retracement of 2025 high to low). Support at 147.15 (38.2% fibo), 146.20 levels. US CPI tonight may also have influence over USD/JPY, with hotter print likely to see the pair extend its move while a softer than expected print may slow the recent rally."