USD/JPY stabilized a bit yesterday after a temporary drop to a new low below 141.77, just before the US CPI release. After the data came out at 2.5%, the pair stabilized as US yields, highlighted in circles on the chart, ticked up slightly, with speculators now expecting a 25 basis point cut rather than a 50 basis point cut.
However, looking at the overall USD/JPY pattern since August 15th, the drop may still be ongoing, which could bring further weakness this week, after the current rally. But overall, we believe this higher-degree 5th wave could come to an end, ideally later this month, below 140. Also, watch out for the 138 swing area from July 2023 as also one of the important levels. 