USDJPY: BUY 147.80, SL 147.60, TP 148.80 | 29 July 2025

USDJPY:

The dollar reached fresh five-month highs against the yen, climbing to 147.80 amid ongoing policy divergence between the US and Japan. The Bank of Japan left its YCC policy unchanged, maintaining the -0.10% short-term rate, keeping JGB yields well below their US counterparts.

Inflation in Japan is slowing: the core CPI for June fell to 2.4%, approaching the target level and easing pressure on the BoJ to tighten policy. At the same time, Japan's Ministry of Finance reported a sharp decline in net purchases of overseas bonds by domestic investors, limiting demand for the yen.

Additional support for USDJPY comes from capital inflows into US assets after strong corporate earnings from the tech sector. At this point, any downward correction attempts remain capped while US yields stay around local highs, and the market assesses the probability of Japanese currency interventions as low.

Trade recommendation: BUY 147.80, SL 147.60, TP 148.80

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