USDJPY:
USD/JPY is trading near 152+, reflecting the divergence in economic dynamics between the US and Japan. The market is factoring in the upcoming Bank of Japan decision at the end of the month and the government’s discussed support package, which together keep yields in Japan low and limit the yen’s appeal. Levels above 152 confirm continued interest in buying USD on JPY weakness.
The latest Japan trade balance release showed a deficit, reinforcing doubts about the strength of external demand and adding arguments in favor of accommodative financial-fiscal conditions. Against the backdrop of a resilient dollar and steady energy imports, this structurally supports a higher USD/JPY rate.
Throughout October, the dollar’s strength against the yen and the pair’s sensitivity to external trade headlines and expectations for BoJ decisions were evident. As of today, the fundamental backdrop—trade deficit, expectations of additional stimulus, and yield divergence—remains favorable for the pair’s upward continuation.
Trading recommendation: BUY 152.45, SL 152.20, TP 153.20
Origin: FreshForex
