USDJPY: SELL 148.15, SL 148.50, TP 147.50 | 31 July 2025

Events to watch today:

30.07 15:30 EET. USD - Gross Domestic Product

30.07 21:30 EET. USD - FOMC Rate Decision

USDJPY:

USD/JPY is correcting as traders take profit ahead of the Fed (today) and the Bank of Japan (tomorrow). Demand for the yen is supported by investor caution and by expectations that the BoJ remains open to policy normalization if inflation and wage growth stay firm. This limits further JPY weakening, especially if the Fed’s tone turns out less hawkish.

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The pair’s fundamental crossroads center on US yield dynamics and the BoJ’s inflation risk assessment. Any hints of greater flexibility in yield‑curve management or tolerance for JGB volatility would be read as a step toward less accommodative policy and a stronger yen. Conversely, hawkish Fed signals could lift UST yields and offer temporary support to USDJPY, but would also raise the risk of verbal intervention from Japanese authorities.

At present, the balance of factors points to limited upside for USDJPY and higher odds of a corrective pullback under neutral‑to‑dovish Fed communication. Additional constraints include geopolitical risks and a bid for safe‑haven assets, which traditionally supports the yen during periods of uncertainty.

Trading recommendation: SELL 148.15, SL 148.50, TP 147.50

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