Ella 
In the Asian market on Thursday, USD/JPY fluctuated within a narrow range and is currently just above the 149.00 mark, not far from the one-week high hit the day before.
The market maintains a generally positive risk bias, and the Bank of Japan maintains ultra-loose monetary policy, which is seen as suppressing the safe-haven currency Japanese yen (JPY) and becoming a tailwind for USD/JPY. However, the dollar remains subdued and upside remains limited as prospects for further interest rate hikes by the Federal Reserve (Fed) diminish and U.S. Treasury yields fall further.
Traders also appeared reluctant to make aggressive directional bets, preferring to stay on the sidelines ahead of the release of U.S. consumer inflation data early in the U.S. session. All-important U.S. inflation will play a key role in shaping market expectations for the Fed’s path to raising interest rates going forward. This, in turn, will drive near-term dollar demand and help determine future USD/JPY volatility.
From a technical perspective, USD/JPY remains confined to a volatile range over the past week or so. USD/JPY has formed a rectangle in the short term, indicating that the direction of USD/JPY is unclear. Meanwhile, USD/JPY swings could still be seen as a bullish consolidation, following a rebound from July’s monthly swing lows. Additionally, the daily chart oscillators remain in positive territory.
The above pattern suggests that the path of least resistance for USD/JPY is to the upside. That said, it would still be prudent to wait for USD/JPY to sustain a breakout of the 149.30-149.35 supply zone at the upper end of the trading range before committing further gains. Subsequent gains are likely to lift USD/JPY towards the psychological 150.00 mark, which has been viewed as a potential intervention level.
However, if USD/JPY continues to strengthen, it will serve as a new trigger level for bullish traders and open room for further gains towards the 151.00 round figure. This momentum could be extended and push USD/JPY closer to the 152.00 mark, the multi-decade high hit in October 2022.
On the other hand, after the USD/JPY has clearly consolidated and declined, it seems that it will now find some support near the 148.55-148.50 area, and then the weekly low near 148.15. Following this, the 200 simple moving average is currently trading just below the 148.00 round figure on the 4-hours chart. If USD/JPY falls below this level, it could fall towards the 147.30 area, the lowest level since September 14th hit last Tuesday.
