USDJPY: BUY 148.30, SL 148.10, TP 149.50 | 13 August 2025

Event to watch today:

12.08 15:30 EET. USD - Consumer Price Index

USDJPY:

The yen has refreshed monthly lows as the Bank of Japan last week reaffirmed its commitment to ultra-loose policy and kept the 10-year JGB yield target around 1.49%. Inflation is easing, with July core CPI falling to 1.7%, below the target range — an argument for maintaining yield-curve control.

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Against this backdrop, the U.S. 10-year yield climbed toward 4.25% on expectations of a firm CPI print, widening the spread with Japanese bonds to 425 bps. Accelerated Japanese capital outflows into dollar assets support USDJPY. Japan’s Ministry of Finance has only issued verbal warnings about possible interventions, with no actual dollar selling observed — market participants view 150 as the next target.

Dollar demand is also supported by steady oil prices above $85/bbl, which increase Japan’s import bills. Higher commodity prices worsen the country’s trade balance and spur additional dollar purchases by Japanese corporates for settlements.

Trade recommendation: BUY 148.30, SL 148.10, TP 149.50

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