USDJPY:
The policy‑rate gap between the US and Japan is widening again. The Federal Reserve signals it will keep the Fed Funds rate at its peak until Q4, while the Bank of Japan continues yield‑curve control, capping 10‑year JGB yields near 1.2 % through targeted bond purchases. This suppresses domestic yields, underpinning USDJPY above 148.50.
Political risk further weighs on the yen. Polls ahead of the 20 July upper‑house election suggest the ruling coalition may lose its majority, historically prompting local institutions to load up on government bonds, lowering yields and weakening the currency.
Japan’s finance ministry did not flag any FX intervention plans for Q3, describing recent moves as “orderly”. With official dollar sales unlikely and the dollar index pressing three‑week highs, the pair could retest the March peak at 149.60. A stop at 148.10 aligns with a short‑term importer demand zone.
Trade idea: BUY 148.60, SL 148.10, TP 149.60
Origin: FreshForex
