USDJPY:
The yen remains under pressure around 147.30 due to a wide divergence of monetary regimes. The Fed signals willingness to keep rates restrictive for longer given sticky core inflation, while the Bank of Japan maintains an ultra‑loose stance: it manages the yield curve and keeps real rates negative. This supports carry trades and fuels demand for the dollar against the yen.
Inflation in Japan shows unevenness, without a sustained overshoot of the target after stripping out last year’s cost‑shock effects. With weak domestic activity and export dependence on the global cycle, the BoJ has little reason to rush tightening. The Ministry of Finance periodically steps up verbal warnings, but actual intervention activity is typically tied to sharp one‑sided moves and excessive volatility — the current dynamics look manageable.
The U.S., in turn, remains attractive: positive employment dynamics and resilient consumer spending bolster the dollar and support yields. Unless the BoJ signals a regime shift or the MoF moves to active interventions, the fundamental vector for USDJPY remains upward, given the positive rate differential and demand for dollar assets.
Trade idea: BUY 147.30, SL 147.50, TP 148.70
Origin: FreshForex
