FXstreet.com (San Francisco) - The USD/JPY broke out of its short-term consolidation pattern around 81.50 to fresh 7-month highs on Tuesday, extending as high as 81.75 and gaining ground for a fifth straight day. The move comes on the back of persistent JPY weakness on expectation that the Bank of Japan will move to loosen monetary policy to weaken its currency.

“USD/JPY broke above its Fibo resistance level at 81.50 and the lack of any pullback at all will have the bulls feeling very comfortable,” says Sean Lee, founder of FXWW. “The long term charts look to be forming a springboard for a move higher and my initial target is the 200-week MA, currently at 85.20, which was last breached 5 years ago.”

Japanese October Merchandise Trade Balance figures are on offer today. There is an expectation of a shift in the trade balance, from surplus to deficit.