USDJPY:
The yen remains weak: markets price a continued gradual path from the Bank of Japan and the government’s readiness to support growth, even acknowledging the costs of a soft currency. This week, attention turns to the BoJ meeting and comments on the timing of the next normalization step—expectations of abrupt changes are low, keeping the yield differential in the dollar’s favor.
The U.S. backdrop adds support: an expected Fed rate cut is already partly in prices, yet U.S. yields still exceed Japanese ones, and the overall risk mood does not push investors strongly into defensive assets. This keeps USDJPY near multi-year highs; even short bouts of yen strength remain brief for now.
In addition, Tokyo’s economic team notes that a weaker yen has positive effects via exports and tourism, reducing the likelihood of aggressive measures to force rapid currency strengthening. Risks include possible verbal signals from the Ministry of Finance and sudden interventions, but the base case is a sustained high range.
Trading recommendation: BUY 152.45, SL 151.95, TP 153.25
Origin: FreshForex
