USDJPY: SELL 143.40, SL 143.60, TP 142.40 | 26 May 2025

An event to watch out for today:

2:30 EET. JPY- Consumer Price Index

USDJPY:

The Japanese Yen (JPY) rose on Friday following the release of Japan's consumer inflation data, which opens the door to further interest rate hikes by the Bank of Japan (BoJ). However, investors seem convinced that policymakers will assess tariffs and trade flows before making the next move. Nevertheless, this is still a significant divergence compared to bets that the Federal Reserve (Fed) will lower borrowing costs again in 2025. This further favours the yen against its US counterpart.

Meanwhile, trade talks between the US and Japan appear to be progressing as officials continue to meet regularly. Moreover, Japan's chief tariff negotiator Ryosei Akazawa is set to visit the US around 30 May for another round of talks with the Trump administration. This raises hopes for a trade deal soon and is seen as another supportive factor for the Japanese Yen. In addition, the emergence of new US Dollar (USD) selling did not help the USD/JPY pair to take advantage of the previous day's good bounce from the 142.80 area, or more than two-week low.

Trading recommendation: SELL 143.40, SL 143.60, TP 142.40

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