USDJPY:
The yen consolidates around 147.5 per dollar after a strong weekly swing. Support for the currency comes from Bank of Japan signals: the regulator allows for further rate increases if projections for inflation and wages are confirmed. At the same time, a risk-off tone linked to the U.S. federal agencies’ shutdown supports demand for perceived safe assets, including yen-denominated instruments.
On the U.S. side, the picture is mixed: private employment measures indicate slower hiring, and interest-rate markets continue to price the probability of a cut this autumn. This presses on U.S. Treasury yields and limits the dollar’s upside against the yen. All else equal, there is room for a moderate pullback in USDJPY toward the middle of the 146–148 band.
Japan’s domestic indicators (manufacturing conditions, corporate expectations) are gradually improving, giving the BoJ arguments in favor of policy normalization toward year-end. If the official tone persists and U.S. yields remain under pressure, the pair may test lower levels near 146.5.
Trading recommendation: SELL 147.55, SL 148.05, TP 146.50
Origin: FreshForex
