USDJPY: SELL 146.00, SL 146.40, TP 144.90 | 13 May 2025

USDJPY:

The Japanese yen (JPY) hit a one-month low against the US dollar (USD) during the Asian session on Monday, reacting to optimism over trade deals between the US and China. On Sunday, the US and China concluded trade talks in Switzerland on a positive note, which boosted investor confidence and undermined demand for traditional safe-haven assets including the yen. In addition, worries over Japan's growth prospects amid uncertainty over US tariffs further weighed on the yen. On the other hand, the US dollar has received support from the Federal Reserve's (Fed) hawkish pause earlier this month and easing fears of a US recession.

However, traders may refrain from aggressive bets and prefer to wait for a joint statement from the US and China on trade talks in Geneva. In addition, favorable Japanese household spending data released on Friday bolstered the case for further Bank of Japan (BoJ) policy normalization and should help limit deeper yen losses. Meanwhile, the prospects for further interest rate hikes by the BoJ are strongly at odds with expectations of at least three rate cuts by the Fed. This, in turn, calls for some caution before positioning for a continuation of the USD/JPY pair's recent good recovery from its low for the year, a level just below the psychological 140.00 mark.

Trading recommendation: SELL 146.00, SL 146.40, TP 144.90

FreshForex offers a wonderful 300% bonus on every deposit of $100 or more, giving you the opportunity to increase your trading volumes!