USDJPY:
Dollar/yen holds above 148 amid steady U.S. yields and a measured pace of policy normalization in Japan. The latest Bank of Japan minutes kept a cautious assessment of the economic and inflation outlook: price growth acceleration remains uneven and strongly dependent on wage dynamics. This does not create an urgent case for a sharp tightening in Japan.
Demand for the dollar is supported by expectations that the Fed’s easing path will be gradual and strictly guided by incoming data. In the near term, investors are watching the U.S. PCE report and GDP updates, which could keep yield spreads in the dollar’s favor. This sustains preference for dollar assets over the yen and structurally supports USDJPY.
Traditional risks for long positions persist: verbal signals from Japanese authorities if the yen weakens excessively, and sudden shifts in global risk appetite. Even so, given the current balance of factors, the pair remains inclined to move higher unless U.S. data decisively change expectations for the rate differential.
Trade recommendation: BUY 148.75, SL 148.25, TP 149.50
Origin: FreshForex
