USDJPY: SELL 145.30, SL 145.60, TP 144.20 | 05 May 2025

Event to watch out for today:

15:30 EET. USD - Non-Farm Payrolls

USDJPY:

The Japanese yen (JPY) remains under pressure amid continued soft rhetoric from the Bank of Japan (BoJ), continuing to slide towards a three-week low against the US dollar during the Asian trading session on Friday. The BoJ, in particular, revised downward its forecasts for economic growth and inflation for the current year, citing increasing uncertainty over the trade policy of the United States. Against this backdrop, investors reduced expectations of a possible tightening of monetary policy in Japan, which contributed to further weakening of the yen.

Additional pressure on the yen is exerted by growing optimism about the possible easing of trade tensions between the United States and China, the world's largest economies. Strengthening risk appetite is also fueled by expectations of new tariff agreements between the U.S. and a number of key trading partners, which has a negative impact on demand for the traditionally “safe” Japanese currency.

In addition, data indicating an unexpected rise in the unemployment rate in Japan are adding to the pressure on the yen. At the same time, rising US Treasury yields are helping to strengthen the US dollar, allowing it to hold near multi-week highs and supporting the USD/JPY pair's growth for the fourth consecutive session. Nevertheless, expectations of more decisive monetary easing measures from the Federal Reserve (Fed) may limit the potential for the US dollar to strengthen and thus provide some support to the yen, especially on the eve of the release of the US Non-Farm Payrolls (NFP) data.

Trading recommendation: SELL 145.30, SL 145.60, TP 144.20

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