USD/JPY Range-Bound: US Rate Outlook Key to Breaking Consolidation

USD/JPY remains trapped in a 146.00-147.00 range as markets await clearer signals on US interest rate direction. The pair trades at 146.45, with implied volatility dropping to multi-week lows, indicating trader indecision. S&P 500 futures edge 0.2% higher while VIX futures decline, suggesting improving risk sentiment that typically supports USD/JPY. However, uncertainty over Federal Reserve policy keeps buyers cautious above 147.00 resistance. Technical patterns show a potential ascending triangle formation, with a breakout target near 148.50 if 147.00 gives way. Conversely, failure below 146.00 could accelerate declines toward 145.00. Market positioning data reveals leveraged funds slightly short yen, leaving room for squeeze higher if US data disappoints. The upcoming FOMC minutes and US employment data will likely determine whether the current consolidation resolves higher or lower.