USDJPY:
The yen finds support amid rising market volatility and position trimming ahead of the Bank of Japan meeting on October 29–30. Political changes in Tokyo come with an emphasis on sustained wage growth as a condition for meeting the price objective, increasing market sensitivity to potential tightening signals in the coming months.
At the same time, expectations of a Fed rate cut at the end of October limit the upside in U.S. Treasury yields and reduce the dollar’s appeal versus the yen. The mere possibility that the BoJ may take further steps toward normalization keeps USDJPY from revisiting yearly highs.
Additional support for the yen comes from improving trade indicators and vigilance over the risk of verbal intervention by Japanese authorities if the currency weakens excessively. The combination of these factors provides a fundamental case for a downward correction in USDJPY.
Trade recommendation: SELL 151.65, SL 152.15, TP 150.90
Origin: FreshForex
