USD/JPY has already rallied to its highest since October and very nearly to levels where today's average true range projection and 10-day Bolli band envelops reside at 105.84/88.
These are the last defenses against a test of the 38.2% Fibo of the March-January slide and October's highs at 106.08/11 on EBS.

In any event, a close above the 200-day moving average at 105.54, that it broke intraday on Feb.
5 and 8, would suggest the 106.08-11 hurdles will be tested before a correction.
Pending bearish RSI divergence makes a very tight fade into the 106.08-11 hurdles a decent risk, with tenkan and kijun props at 105.11/4.57 potential targets in the absence of a close above the October highs.

Meanwhile, rising Treasury-JGB yield spreads, last month's reversal of the 111.715-102.595 pandemic downtrend and last week's lows holding a confluence of key supports, favors buying dips while above the daily kijun at 104.57.
Indeed, with 10-year Treasury-JGB yield spreads their highest since March 2, 2020, when USD/JPY closed at 108.31, bulls have the edge.

The 4-week squeeze of 31% of the biggest IMM net spec short since 2016 still has some room to run if the 106.08/11 hurdles are eventually cleared.
One-month risk/reversals today fell to their least bearish in four years as vols finally turn up.

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