USDJPY: SELL 142.80, SL 143.00 , TP 141.90 | 08 May 2025

Event to pay attention today:

21:00 EET. USD - FOMC Key Interest Rate Decision

21:30 EET. USD - FOMC Press Conference

USDJPY:

The USD/JPY pair traded weaker on Tuesday, hovering in the 142.00 area as safe-haven demand strengthens the Japanese yen. Risk aversion has increased as global investors react to rising geopolitical uncertainties, including tensions in the Middle East, renewed trade restrictions and changes in global central bank dynamics. Market participants are awaiting the outcome of the US Federal Reserve's decision on Wednesday, paying particular attention to the tone of Chairman Jerome Powell's guidance.

In Washington, US President Donald Trump held a joint press conference with Canadian Prime Minister Mark Carney where he downplayed the need to renegotiate the USMCA and focused on broader trade priorities. Trump's comments on China's economic woes and his administration's active negotiations with 17 trading partners added to market anxiety. Meanwhile, Treasury Secretary Scott Bessent confirmed that the U.S. has formally rejected Japan's request for tariff cuts, maintaining duties of 10 per cent and 14 per cent on Japanese exports. Japan's efforts to reach a comprehensive trade deal remain stalled, adding to the uncertainty in bilateral relations.

US economic data continues to show a mixed picture. The trade deficit widened significantly in March, which likely contributed to the downward revision of the first quarter GDP data. Although April's ISM Services PMI rose to 51.6 from 50.8, domestic components such as activity and employment disappointed. The Atlanta Fed's GDPNow model now forecasts second quarter GDP growth of 1.1%, which is in sharp contrast to previous forecasts.

Trading recommendation: SELL 142.80, SL 143.00, TP 141.90

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