USDJPY: SELL 147.30, SL 147.50, TP 146.10 | 19 August 2025

USDJPY:

USD/JPY remains under pressure after the drop on weak US labor data in early August and a mixed recovery alongside UST yields, supporting a scenario of capped rebounds and elevated downside risks into this week.

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News flow highlighted a move below 147.50 on the soft NFP, followed by a rebound on hotter PPI and firmer yields; however, the underlying imbalance in favor of the yen intensifies when markets reprice the Fed’s rate path and Treasury yields lower. By mid-August, a consensus view emerged that USD/JPY spikes are used to sell while UST yields lack a sustained uptrend, with the BoJ maintaining readiness for verbal signals against undesirable FX moves.

In the medium term, the balance of factors tilts toward a gentle weakening of USD versus JPY: expectations for earlier/larger Fed easing periodically strengthen on data (as seen after NFP), and any pause in rising US yields quickly filters into USD/JPY. At the same time, proximity to 147–148 and elevated sensitivity to US macro releases keep volatility high; in this setup, “sell-on-rallies” with a moderately tight stop is justified.

Trading recommendation: SELL 147.30, SL 147.50, TP 146.10

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