USDJPY: SELL 149.20, SL 150.00, TP 148.40 | 27 Febrero 2025

USDJPY:

The USD/JPY pair rebounded towards 149.30 during Asian trading on Wednesday, but the Japanese yen (JPY) is likely to weaken, as global risk-off sentiment and rising bets on an interest rate hike by the Bank of Japan (BoJ) could limit the pair's gains.

The BoJ is expected to raise rates from 0.50 to 0.75 per cent this year, which could affect investor sentiment and support the Japanese Yen. According to Bloomberg data, overnight index swaps fully anticipate higher borrowing costs by September and suggest a 50 per cent hike as early as June.The service producer price index (PPI) released on Tuesday supports the idea of a BOJ rate hike, coming on the back of strong consumer inflation figures in Japan, which confirms the prospect of further interest rate hikes by the Bank of Japan, which continues to support the Yen.

The Conference Board's US Consumer Confidence Index fell to 98.3 in February from 105.3 the previous month, marking the largest drop since August 2021. This, in turn, could exert pressure on the dollar against the yen.Traders will be monitoring the Federal Reserve's (Fed) comments this week for any indications of a hawkish shift in policy, which could result in a strengthening of the US Dollar in the near term.

Trade recommendation: SELL 149.20, SL 150.00, TP 148.40

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