USDJPY: BUY 145.00, SL 144.60, TP 146.10 | 12 June 2025

An event to watch out for today:

15:30 EET. USD - Consumer Price Index

USDJPY:

The Japanese yen (JPY) is attracting new sellers during Tuesday's Asian session as optimism about the resumption of trade talks between the US and China undermines demand for safe-haven assets. This, along with moderate growth in the US dollar (USD), pushes the USD/JPY pair above the psychological mark of 145.00, to an almost two-week high in the last hour. However, a combination of factors may keep JPY bears from aggressively betting on the direction of movement and limit the currency pair's growth.

Amid signs of rising inflation in Japan, the upward revision of first-quarter GDP confirmed bets that the Bank of Japan (BoJ) will continue to raise interest rates. This marks a significant divergence from the relatively dovish policy of the Federal Reserve (Fed), which should limit the USD's rise and favor the lower-yielding Japanese yen. In addition, ongoing trade uncertainty and growing geopolitical tensions support the prospect of some bargain hunting in the Japanese yen.

On Tuesday, senior US and Chinese officials will meet for the second time in London for talks aimed at resolving the ongoing trade dispute between the world's two largest economies. Investors remain hopeful for a breakthrough on export controls on commodities such as rare earth metals, which continues to support risk sentiment and undermines the Japanese yen's safe-haven status.

Trading recommendation: BUY 145.00, SL 144.60, TP 146.10

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