USD/JPY rose on Friday, breaching 141.50 yen and hitting fresh multi-month highs after the Bank of Japan maintained its ultra-loose stance and U.S. Treasury yields resumed gains ahead of the long weekend.

To provide some context, the Bank of Japan held its short-term interest rate target steady at -0.10% and left its yield curve control program unchanged at the end of its June policy meeting, signaling little intention to change its stance in the coming months.

The central bank's relentless efforts to protect the country's weak recovery and nascent inflation after decades of deflation could weigh on the yen in the short term, especially against high-yielding currencies such as the dollar.

While USD/JPY has some upside, traders should start to be more cautious, especially if the pair moves above 145.00 yen. Last year, Japanese authorities intervened in the market when the exchange rate was hovering between 146.00 and 152.00.

If the yen continues to weaken rapidly, the government may start selling dollars to curb speculation in the foreign exchange area and support the domestic currency. Keep this in mind going forward to avoid getting caught on the wrong side of the trade.

USD/JPY has been circling within a symmetrical triangle of late, but broke out of a continuation pattern earlier this week, resolving the upside, as seen on the daily chart below.

While the breakout has continued so far, the price needs to hold above 140.40/140 to maintain the bullish momentum. If that happens, USD/JPY could soon gather more strength to challenge 142.50, a key resistance defined by the 50% Fibonacci retracement level of the October 2022/January 2023 sell-off.

Conversely, if sellers regain control and push the pair below 139.75, we could see a drop towards 139.00. If there is further weakness, sellers could attack the psychological barrier of 138.00.