USDJPY: BUY 148.60, SL 148.00, TP 149.50 | 25 August 2025

Event to watch today:

22.08 17:00 EET. USD - Federal Reserve Chairman Jerome Powell Speaks

USDJPY:

USD/JPY trades near the top of its recent range as the yen underperforms most G10 peers amid a persistent yield advantage in favor of the U.S. Japan’s latest inflation readings came in slightly above expectations, but markets still assume the Bank of Japan will move cautiously, awaiting firmer evidence that wage gains are flowing into durable consumption. That limits near-term appreciation potential for the yen.

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On the U.S. side, expectations around the Fed continue to underpin the pair: even if rate cuts resume in the autumn, the rhetoric heading into Jackson Hole is likely to stay balanced. Ahead of the next labor and inflation reports, the Fed has reasons to avoid firm commitments, which helps the dollar hold ground against low-yielders including JPY.

News flow from global asset managers also points to “buy-the-dip” behavior in USDJPY: importer demand, high sensitivity to U.S. yields, and persistent policy divergence create a fundamental cushion for the upside. Assuming today’s backdrop persists, a strategy of buying on pullbacks with a tight stop remains justified.

Trade recommendation: BUY 148.60, SL 148.00, TP 149.50

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