USDJPY: BUY 147.50, SL 147.20, TP 148.50 | 23 July 2025

Event to watch today:

22.07 15:30 EET. USD – Federal Reserve Chair Jerome Powell will give a speech

USDJPY:

The pair opened the week around 147.50, reacting to elections for Japan’s upper house in which the ruling coalition lost its majority – increasing the likelihood of additional fiscal stimulus and yen weakness.

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Inflation in Japan remains subdued and real wages are stagnating, so the market does not expect the Bank of Japan to tighten policy before the end of 2025. The yield gap between 10-year U.S. Treasuries and JGBs hovers near yearly highs, driving capital out of low-yielding JGBs into U.S. assets and supporting USD demand.

Additional support for the dollar stems from global trade frictions and the Fed’s cautious stance: the U.S. central bank is in no hurry to cut rates. Under these conditions, pullbacks of USDJPY below 147.50 are seen as opportunities to reopen long positions, with targets near the psychological barrier of 150.00 and an interim objective of 148.50.

Trading recommendation: BUY 147.50, SL 147.20, TP 148.50

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