USDJPY:
Despite some profit-taking after the rise toward 148.0, the pair remains supported by monetary policy divergence. The 10-year U.S. Treasury yield is approaching 4.46%, while comparable JGBs remain around 0.82% even after the summer expansion of the YCC band.
Weak momentum in the Japanese economy increases the likelihood that the Bank of Japan will postpone further tightening: real wages have fallen for the sixth consecutive month, and core CPI has eased to 2.4% y/y, reducing the pressure on the regulator to normalize policy. At the same time, Japan’s Ministry of Finance refrains from verbal interventions, being comfortable above the 145.0 level, which reduces the risk of aggressive dollar selling.
Global risk appetite remains moderate after strong U.S. PPI data, which traditionally channels capital into U.S. assets and supports USD against JPY.
Trade recommendation: BUY 147.30, SL 147.10, TP 148.40
Origin: FreshForex
