USDJPY:
The yen is supported by safe-haven demand and expectations of a firmer Bank of Japan stance on borrowing costs by the end of the month. Against this backdrop, the pair has been posting local lows below 147, and the decline in U.S. yields narrows the rate differential, making short positions in USDJPY fundamentally justified.
An additional factor pressuring the dollar is the risk surrounding the functioning of the U.S. government and the high probability of a Fed rate cut in October. These circumstances reduce the premium for holding the dollar and encourage a partial reassessment of exchange-rate expectations in favor of the yen.
The traditional support factor for JPY also persists—flows into “safe havens” during periods of political uncertainty in the United States. Taken together, this forms the basis for further declines in USDJPY, provided there are no sharp verbal interventions from the Japanese authorities.
Trading recommendation: SELL 147.20, SL 147.40, TP 146.50
Origin: FreshForex
