USDJPY:
USD/JPY holds near multi-week highs thanks to the yield differential and a cautious tone among investors before the FOMC meeting. Elevated nominal and real US yields, alongside restrained monetary conditions in Japan, keep a positive differential in favor of the dollar and support buying interest in the pair.
On the domestic side for Japan, the market still expects very low funding costs in the near term and a gradual approach to any future changes by the Bank of Japan. Given modest domestic demand and uneven price dynamics, JGB yields remain contained, leaving the yen with few sustained drivers for appreciation.
External factors also favor the dollar: persistent inflows into US instruments amid global uncertainty underpin the trend. Proximity to areas that may trigger comments from Japanese authorities calls for careful risk management, but fundamentally there are still limited preconditions for a meaningful softening of the USD against the JPY.
Trading recommendation: BUY 152.90, SL 152.25, TP 153.90
Origin: FreshForex
