The USD/JPY chart shows a bullish trend at the start of March, influenced by the escalation of military activity in the Middle East.

On one hand, the US dollar is strengthening due to increased demand for safe-haven assets. On the other, the Japanese economy is under pressure because of its heavy reliance on oil imports from the Middle East.

These factors have pushed the pair above 159.20 JPY per USD this week, surpassing the January high (point A). The 2026 peak lies nearby; however, technical analysis suggests that bullish momentum may be fading.

In our note of 26 February, we:
→ updated the wide ascending channel along with the intermediate growth trajectory (shown in purple);
→ highlighted signs of seller activity near 156.600.

As indicated by the arrow on the USD/JPY chart, after a small pullback to the lower purple line, buyers resumed their efforts, with the 156.600 level now acting as support.

Currently, we can observe that:
→ the RSI indicator is forming a bearish divergence;
→ it is becoming increasingly difficult for the price to reach the upper boundary of the purple channel;
→ the brief breach of point A resembles a bearish Liquidity Grab.

Additional bearish factors include:
→ the line dividing the upper half of the long-term channel into two parts;
→ proximity to the psychological 160 JPY per USD level.

It is worth recalling that in 2024, 1 USD briefly exceeded 160 JPY, but this level did not hold, as the Bank of Japan intervened. This context adds significance to the upcoming BOJ announcements, scheduled for next Thursday. Ahead of this event, USD/JPY may consolidate around current levels.

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