USDJPY: SELL 144.20, SL 144.40, TP 143.20 | 05 Junio 2025

Events to watch out for today:

17:00 EET. USD - ISM Services Business Activity Index

15:15 EET. USD - ADP Employment Change

USDJPY:

The Japanese yen (JPY) is attracting some intraday buyers after falling against the US dollar during the Asian session, and, at least for now, it seems that its pullback from the weekly high reached yesterday has paused. An upward revision of Japan's services business activity index, as well as expectations that wage growth will lead to faster inflation, leave open the possibility of another interest rate hike by the Bank of Japan (BoJ) in 2025. In addition, ongoing geopolitical risks and trade uncertainty are key factors supporting the JPY.

Meanwhile, cautious statements by BoJ Governor Kazuo Ueda on Tuesday sparked speculation that the next interest rate hike will not happen anytime soon. However, this still differs significantly from expectations that the Federal Reserve (Fed) will cut rates by at least 25 basis points (bps) by the end of this year. This, along with concerns about the US budget, is causing a new wave of selling of the US dollar (USD) after Tuesday's decent rebound from a six-week low and is putting some pressure on the USD/JPY pair during the Asian session.

Trading recommendation: SELL 144.20, SL 144.40, TP 143.20

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