USD/JPY faces sharp reversal risk to 136 warns Nomura

Nomura analysts project a potential 6% decline in USD/JPY from current levels near 145 to 136, citing overextended positioning and technical exhaustion. The dramatic forecast represents a significant shift in market dynamics, as the pair has maintained an upward trajectory throughout 2025. Key factors supporting the bearish outlook include extreme long dollar positions among speculators, declining US-Japan yield differentials, and potential Bank of Japan policy normalization. Technical indicators show bearish divergence on daily charts, with RSI readings above 70 suggesting overbought conditions. The 136 target aligns with the 200-day moving average and represents a critical support zone from Q4 2024. Traders should monitor upcoming BOJ meeting minutes and US Treasury yields for catalysts that could trigger the reversal. A break below 143.50 would confirm the bearish scenario and accelerate selling pressure.