USDJPY: BUY 145.70, SL 145.50, TP 146.60 | 30 May 2025

Event to pay attention today:

15:30 EET. USD - Initial jobless claims

USDJPY:

The Japanese yen (JPY) attracted active selling during Thursday's Asian session in response to news that a US federal court had blocked the entry into force of President Donald Trump's ‘Liberation Day’ tariffs. This event is boosting investor confidence and triggering a new wave of risk-taking, which in turn is putting strong pressure on traditional safe-haven assets, including the yen. In addition, the Federal Reserve's (Fed) wait-and-see stance continues to contribute to strong growth in the US dollar (USD) and helps the USD/JPY pair extend its weekly uptrend for the fourth day in a row.

Furthermore, demand at Wednesday's auction of 40-year Japanese government bonds (JGBs) fell to its lowest level since July, pointing to concerns about Japan's debt burden. This leads to a further sharp decline in the yields of the longest-term JGBs and is another factor driving investors away from the Japanese yen. Meanwhile, growing recognition that the Bank of Japan (BoJ) will continue to raise interest rates contrasts sharply with forecasts that the Fed will continue to lower borrowing costs in 2025. This may deter traders from aggressive bearish bets on the lower-yielding Japanese yen and limit the upside for the USD/JPY pair.

Trading recommendation: BUY 145.70, SL 145.50, TP 146.60

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