As the USD/JPY chart indicates, the rate has risen approximately 5.4% above the August 5 low.

On one hand, the yen's weakening against the U.S. dollar is partly driven by rumours that the Bank of Japan might intervene not to support the weak yen (as when the rate was above 160) but to weaken it further. "Intervention history shows that after yen-buying interventions, yen-selling interventions followed to curb excessive yen strength," Reuters reports, reflecting analysts' views.

On the other hand, the dollar strengthened yesterday as robust U.S. economic data all but dispelled fears of a recession.

Technical analysis of the USD/JPY chart shows:

→ Since the second half of July, price action has formed a broadening downward structure between two red lines.
→ The price has mostly moved within this structure, finding temporary support at levels marked by blue lines.

An interesting detail on the USD/JPY chart is that when the price broke upwards through the red line from an oversold zone (indicated by the first arrow), the 145.4 level near the breakout became a significant support.

A similar situation is now unfolding: the price is breaking through the red line (Red2) from below (indicated by the second arrow). By analogy, it's reasonable to expect the price to find support around the 147.93 level.

If the bulls gain confidence, they might attempt to challenge the psychological level of 150 yen per U.S. dollar.

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