Technical Analysis:
USD/JPY made an aggressive bullish reversal on Wednesday following President Trump’s announcement of a 90-day tariff pause on China, sparking a broad-based rally in risk assets and boosting short-term Treasury yields. The pair swiftly rebounded above key technical support levels, notably reclaiming the lower 21-day Bollinger Band at 145.99, alleviating immediate bearish pressures. This sharp recovery has considerably improved the pair's technical stance, highlighting increased bullish prospects in the near term.

The formation of a dragonfly doji candlestick provides a strong technical signal of potential trend reversal, suggesting the recent bearish momentum may have exhausted itself at the lows. To validate this bullish reversal, USD/JPY needs to decisively clear immediate technical hurdles at the 9-day EMA, currently at 147.69, and then the critical resistance at the March low of 148.18. A sustained break above these levels would shift the short-term trend back toward bullish territory, targeting further upside toward the psychologically important 150.00 barrier.

However, caution remains warranted, as volatility remains elevated ahead of Thursday’s key U.S. CPI data. Immediate downside protection is offered by the ascending trendline originating from January 2023 lows, now solid support at 143.75. A failure to sustain current gains followed by a retest and breach of this trendline support would restore bearish momentum, likely triggering further downside moves toward deeper technical levels around 143.00. Traders should therefore remain vigilant, closely monitoring price action around key resistance at 148.18 and critical support at 143.75 for directional clarity.