USDJPY: SELL 148.35, SL 148.95, TP 147.35 | 13 Marzo 2025

Event to pay attention to today:

14:30 EET. USD - Consumer Price Index

USDJPY:

The Japanese yen (JPY) continued to lose ground against its US counterpart for the second day in a row and moved away from the highest level since October, reached the previous day. Fears that US President Donald Trump may impose new tariffs against Japan have proved to be key factors undermining the safe-haven yen. Nevertheless, a significant Yen depreciation still seems unlikely amid hawkish expectations from the Bank of Japan (BoJ).

Data released today showed that Japan's annual wholesale inflation, the Producer Price Index (PPI), rose by 4.0% in February, indicating that inflationary pressures are intensifying. In addition, hopes that the sharp wage increases seen last year will continue into this year support the market's growing confidence that the Bank of Japan will raise interest rates further. This, should serve as a tailwind for the low-yielding yen and help limit losses.

In addition, lingering concerns over the possible economic consequences of Trump's trade policies and a global trade war should support the JPY. The US Dollar (USD), on the other hand, is near multi-month lows amid expectations that a tariff-induced slowdown in the US economy will force the Federal Reserve (Fed) to cut borrowing costs several times this year. This should help limit the USD/JPY pair's rise.

Trade recommendation: SELL 148.35, SL 148.95, TP 147.35

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