USD/JPY is looking to head higher.

The pair is up for a second day as stock momentum slows, Treasury yields close price gaps left from Wednesday and the offshore yuan weakens.

Downward pressure on USD/JPY appeared to be already easing last week. It did not reach oversold on its 14-day RSI even as asset prices elsewhere tumbled, a sign that the yen gains were likely driven by declining yields rather than a rush to safety. In Japan, there are clear worries that tariffs could adversely impact economic growth and the inflation outlook. Earlier on Monday, the Bank of Japan highlighted that some Japanese companies are concerned about increased uncertainty regarding U.S. trade policy. Following this, Japanese Prime Minister Shigeru Ishiba expressed his disappointment to U.S. President Donald Trump over his tariff policies, urging him to reconsider as they might hinder Japanese companies' investment capabilities. Trump said on Monday that Japan is sending a "top team to negotiate" and ordered a review of the proposed U.S. Steel acquisition.

With trade and investment discussions ongoing, USD/JPY might look to move toward the top end of April's 144.55-150.49 range. Nearby resistance is at the March 20 low of 148.18, the 21-day moving average at 148.88 and 149.10 pivot. USD/JPY bears are likely to hesitate to reengage until it drops below its lower Bollinger band at 146.31.
Yen

(Robert Fullem is a Reuters market analyst. The views expressed are his own.)