USDJPY: SELL 149.20, SL 149.70, TP 148.40 | 03 Marzo 2025

USDJPY:

The Japanese yen (JPY) attracted fresh buyers during the Asian session on Friday after sharp remarks from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, who said the core inflation rate is gradually rising towards the 2% target. Uchida's comments confirm bets that the BoJ will continue to raise interest rates this year, which helps offset weaker than expected Tokyo Consumer Price Index (CPI) data and provides a slight lift to the yen. In addition, the risk-off impulse is seen as another factor contributing to the yen's continued safe-haven status.

Meanwhile, the flow of anti-risk sentiment provokes a new decline in US Treasury bond yields. As a result, the narrowing rate differential between the US and Japan is fuelling inflows towards the lower-yielding yen. This, along with weak US Dollar (USD) price action, is causing the USD/JPY pair to move back below the mid-149.00s. However, traders seem reluctant to make aggressive directional bets and prefer to stay on the sidelines ahead of the release of the US Personal Consumption Expenditure (PCE) price index, which will play a key role in USD price dynamics.

Trade recommendation: SELL 149.20, SL 149.70, TP 148.40

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