USD/JPY Surges Strongly as Early Signs of Correction AppearHello everyone, USD/JPY has just gone through a rather “excited” rally, climbing straight from 153 to 157 and is now slowing around 157.38. Looking at the market structure, I feel this is the phase where buyers begin to cool off — momentum remains, but the market’s breathing has shortened compared to previous days.
On the 4H chart, the sequence of green FVGs from the bottom shows buyers continuously absorbing every minor pullback. But as price approaches 157.50–157.80, candles start shrinking, wicks grow longer, and price begins to move sideways as if hesitating. This is often an early signal the market wants to “pause”, especially after an overly fast breakout.
The area I’m watching closely is 156.20–156.00. This zone contains a freshly formed green FVG overlapping the Ichimoku cloud — a type of “air cushion” the market often revisits to rebalance before continuing its move. It feels like the market is waiting for a small dip to refresh after the sharp run-up.
On the news side, U.S. 10Y yields remain around 4.1% and the Fed has not committed to the timing of rate cuts, which keeps the USD supported. Meanwhile, the BoJ remains firm on ultra-loose policy, keeping the Yen weak. Add to that strong gains in U.S. and European equities, capital is flowing out of safe havens, further removing support for the JPY. All of this builds a foundation for the long-term uptrend in USD/JPY, but also increases short-term profit-taking pressure after such an aggressive climb.
Given the current setup, I lean toward a corrective scenario: price pulling back to 156.20–156.00 to sweep liquidity and test the FVG, then if we see a rejection wick or returning buy pressure, USD/JPY could easily bounce back toward 157.50–158.00 in the next few sessions. The broader trend is still bullish, but the market needs a “breather” to regain energy.
What do you think — will USD/JPY dip to retest support first, or break straight through 157.80?
