WHY USDJPY BULLISH ??DETAILED ANALYSIS

USDJPY is currently reacting strongly from a well-established demand zone near the 142.50–143.00 level. After a sharp correction, price has shown signs of exhaustion at support, suggesting a potential bullish reversal is underway. If this bounce sustains, we could see a significant upside move toward the 157.00 region, aligning with the previous high and maintaining the longer-term bullish structure.

From a technical standpoint, this level has historically acted as a key pivot zone. The bullish engulfing candlestick pattern forming here hints at renewed buyer interest, and with risk-reward highly favorable, this could be an ideal entry point for swing traders. The risk remains limited below 139.00, while the upside potential offers over 1:3 reward.

Fundamentally, the divergence in monetary policy between the Federal Reserve and the Bank of Japan continues to support a bullish outlook for USDJPY. Recent U.S. inflation data came in hotter than expected, reigniting speculation that the Fed may delay rate cuts. Meanwhile, the BoJ has shown minimal inclination to shift away from ultra-loose policy, keeping the yen pressured.

This pair remains one of the top-watched on TradingView, drawing high search volume due to its volatility and potential breakout structure. With market sentiment leaning risk-on and yield differentials favoring the dollar, this rebound from support could be the beginning of a new leg up. Keep an eye on DXY movements and U.S. treasury yields for confirmation.