The hourly chart sums up quite nicely the price action over the last two weeks in USD/JPY:

USDJPY H1 29-02
USD/JPY hourly chart

The pair has been somewhat consolidating just below and above the 150.00 mark recently. There has been very little incentive to push higher and that is not too surprising given the bond market developments as seen here.

As such, USD/JPY is seeing a well-defined range between the lower limit near 149.70 and the upper limit around 150.80. And traders are continuing to respect that, even with the sharp drop in price today.

BOJ's Takata hinted at stronger wage hikes for this year and that saw the yen jump. USD/JPY is down 0.6% near the lows for the day but is not really able to break past the lower limit above.

So, what's next for the pair?

There are a couple of moving parts to be mindful of currently. The first one is how Treasuries are going to continue to behave moving forward. While yields have been consolidating as of late, that might change when we get to more relevant US data. And that could be as soon as today with the PCE price index in consideration.

The second is how markets are viewing the BOJ trade at the moment. The negative carry in shorting USD/JPY did not provide any good incentives to get on this trade too early. But if the central bank is firm on taking bolder steps after the spring wage negotiations in March to April, we might be at a turning point for the yen to gain much more ground from hereon.

Considering the technical consolidation in USD/JPY above, a break of that range could see a strong move next. If it is to the downside, that will put the 100-day moving average into focus next - just below 148.00 currently.