USDJPY: BUY 143.00, SL 142.60, TP 144.10 | 06 June 2025
06 June 2025, USD/JPY
An event to watch out for today:
15:30 EET. USD - Initial jobless claims
USDJPY:
The Japanese yen (JPY) is showing moderate weakness against the strengthening US dollar (USD) during Thursday's Asian session, temporarily interrupting the upward movement that began after reaching a weekly low the day before. However, the potential for further yen depreciation remains limited amid growing expectations that the Bank of Japan (BoJ) will continue its cycle of interest rate hikes. These expectations were further confirmed by the publication of statistics showing that real household incomes in Japan have declined for the fourth consecutive month, reflecting the impact of sustained inflationary pressure.
The yen is also being supported by continued investor caution caused by expectations of potential negotiations between US President Donald Trump and Chinese President Xi Jinping. Against this backdrop, there remains a high degree of uncertainty in global trade policy, as well as geopolitical risks, which strengthens the position of the Japanese currency as a reliable safe haven asset in times of instability.
The release of weak macroeconomic data from the US on Wednesday reinforced expectations that the Federal Reserve may begin to cut interest rates in 2025. This factor is putting pressure on the US dollar and, combined with the low yield of the Japanese yen, is helping to hold back the growth of the USD/JPY currency pair.
Looking ahead, the yen retains its potential to strengthen, especially if the Bank of Japan continues to demonstrate its readiness to tighten monetary policy amid persistent inflation and weak real incomes. Higher interest rates, combined with a possible slowdown in the pace of rate cuts in the US, could contribute to sustained demand for the yen from both speculative capital and investors seeking stability amid an unstable external environment.
Trading recommendation: BUY 143.00, SL 142.60, TP 144.10
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The author's opinion reflects their personal view and is not an investment recommendation. The company is not responsible for any trading results based on the provided analytical data.
