USDJPY D1 21-12
USD/JPY vs US Treasury 10-year yields (%) daily chart

The post-BOJ bounce sure did not last long as the pair fails to push above the 145.00 mark before the latest retreat. The drop now sees the pair fall to 142.90 and closes in on the 200-day moving average (blue line) at 142.70. A drop below the key technical level will see sellers resume a more bearish bias in search for further downside momentum.

The Japanese government has made it quite explicit that they are aligned with the BOJ in waiting on next year's spring wage negotiations before a potential policy pivot. The recent headlines have confirmed that and there is one more today as well here. As such, it's now really just a race against the clock for the Japanese central bank.

Adding to the macro picture is lower Treasury yields, as seen with the chart above. 10-year yields are down to 3.86% and that is weighing further on USD/JPY in general as well. Taking that into consideration, it's tough to see the trend in USD/JPY reverse drastically unless there is reason for a squeeze back to the other side for bonds.

The other thing to note now is that we're in the home stretch for trading in 2023. It's hard to really read much into any of the moves amid thinner liquidity conditions, especially now after all the major events having passed. The technicals will continue to offer a bit of a guide but really, this is no time to over-analsyse any market moves.