Japan – July 7, 2026

The yen is worth watching right now, and not just for FX traders. USD/JPY is sitting near 40-year lows even after the Bank of Japan hiked its policy rate to 1.00%, and Tokyo has been openly threatening intervention to stem the slide. That weakness has fueled a massive yen carry trade — investors borrowing cheap yen to fund bets on US tech stocks — with speculative short positions on the yen near multi-year highs. If the yen snaps back sharply, that trade unwinds fast, forcing a rush to sell US equities to repay yen loans, echoing the July 2024 episode when a BOJ hike triggered a global risk-asset selloff in a matter of days. There’s a slower-burning version of the same story in bonds: as JGB yields rise toward levels not seen since the 1990s, Japanese banks, insurers, and pension funds — who collectively hold about $1 trillion in Treasuries — have less reason to keep recycling savings into US debt, and even a gradual pullback could add 15-25 bps of upward pressure on 10-year Treasury yields over the next year or so. Put together, Japan’s policy normalization is a genuine cross-asset risk for US markets: a fast channel through equity-market carry-trade unwinds, and a slow channel through rising Treasury yields and tighter financial conditions.

Here is the Nikkei 225 – smacked right into the 1.618 projection from the all time low … folks, this is a projection from 75+ years ago. SHOULD be big resistance.

Here’s the EWJ and YCS:

Then, the big player, the YEN vs the USD. Folks, remember, the FX world is the apex predator of the financial world … just think of the FX market as the killer whale.

We ID’d a resistance level back in April and, surprisingly, it’s just been taken out to the upside by just a little bit …

Depending on the moves (or not) w/ the BOJ there is also a VERY strong resistance zone higher, keep that in mind:

Tons of confluence a little higher BUT … are we going to make it there?

EURJPY reacted, initially, w/ the ABCD and it was literally a day or so prior to the rate announcement – however – it has run into strong resistance and has been sitting ‘waiting’ for 7 months.

GBPJPY – reacted to the pattern but has since gone higher but, again, is smacking into resistance.

The Aussie broke out against the YEN for the first time in 35 years. I find that a ‘big deal’ as 1/ the AUDJPY did smack into the pattern BUT it has since regained that level and taken out a major resistance level. Note, we had a static time cycle along w/ the ABCD projection so the fact that it broke out after all that … showing some strength. If the AUDJPY closes below that ‘huge breakout” level then something ain’t right at the circle K. Also, note, while this was a NICE time and price confluence it was NOT the BIG turn like the past ones …that’s what we are searching the platonic space for … the geometric confluence of price and time that, literally, completes the platonic solid which encapsulates this collective conciousness investing in the AUDJPY. It went right to the attractor and sold off BUT it was not THE level … the price worked, but it wasn’t TIME. 😉 That’s what I’m working on … time/price confluence in the platonic space which provides the geometric conversion of sacred geometry into price and TIME patterns.

Here’s the CHFJPY … not sure why, but I totally missed the larger ABCD shown w/ the blue arrows … monthly CHFJPY ABCD and now another 7 months of consolidation.

Folks, the FX crosses w/ the YEN appears to be hitting major resistance …

One last, these were big patterns that HIT and allowed for some good financial opportunities but the patterns all eventually failed … except, the USDJPY. Yes, it’s gone just a wee bit higher BUT ultimately, the dollar has been the weakest of the currencies versus the YEN. Hmmmmm ….

Here is a look at the culprit of all this mess … above is the 10 year rates for Japan. Folks, their interest rates are up over 1,000% !!!!

This is going to be very interesting, for sure.