USDJPY: Reversal from 5th-Wave Target Zone

USDJPY has turned sharply lower from the projected 5th-wave target area, potentially driven by suspected BoJ intervention. This development increases the likelihood of further downside, and if bearish momentum strengthens, the pair could extend significantly lower, opening the door to a deeper decline.

On the intraday chart, USDJPY has now completed a clear five-wave decline from the highs following the weaker-than-expected NFP (US jobs) report, confirming that a temporary top is likely in place. After a completed five-wave impulse, a corrective retracement is typically expected. Although USDJPY has retested yesterday's intraday lows, this move could represent wave (B) of an irregular (A)(B)(C) flat correction, with wave (C) still capable of retesting the 161.64–162.00 resistance zone. Alternatively, the latest decline may be completing wave (5), but even in that scenario, we would still expect a three-wave corrective recovery toward the projected resistance area before the broader downtrend resumes.

Overall, the Elliott Wave structure points to a short-term corrective rebound within a developing higher-degree bearish trend.