The Japanese yen has decisively broken above its prior downtrend, with spot now firmly above both the descending trendline and the 21-day moving average. This move represents a material shift in near-term momentum and warrants attention, particularly given the positioning backdrop.

The break of the trendline is technically significant. While the yen has remained under pressure for much of the year, this latest move suggests a pause—or even potential reversal—of the prevailing bearish bias. With spot comfortably through the 21-day, the near-term trajectory appears to be neutralising, if not turning outright constructive. Importantly, this dynamic emerges in the context of increasingly crowded long positioning.

Our read is that the long side is now extreme, and in such conditions, price action becomes more vulnerable to profit-taking or adverse positioning squeezes. However, in the absence of a clear catalyst for reversal—such as a dovish pivot from the BoJ or renewed carry demand—the technical landscape suggests further upside cannot be ruled out in the short term.

What we’re observing may not yet constitute a broader trend reversal, but it does indicate that bearish momentum is fading. As always, confirmation will come from follow-through and broader macro alignment. For now, though, the break above trend is a clear signal that yen bears are losing control of the narrative.