USDJPY: SELL 143.50, SL 143.70, TP 142.60 | 16 Junio 2025

Events to pay attention today:

07:30 EET. JPY - Change in industrial production volume

17:00 EET. USD - University of Michigan Consumer Sentiment Index

USDJPY:

The Japanese yen (JPY) rose to a one-week high against the US dollar during Friday's Asian session, driven by a number of factors. Further escalation of geopolitical tensions in the Middle East is negatively affecting investor sentiment and stimulating demand for traditional safe-haven assets, including the Japanese yen. In addition, growing recognition that the Bank of Japan (BoJ) will stick to its course of monetary policy normalisation is another factor contributing to the relative strength of the JPY.

However, a modest rebound in the US dollar (USD) from its lowest level since March 2022 is helping the USD/JPY pair to reduce its significant daily losses to the 142.80-142.75 level. However, any significant strengthening of the US dollar seems unlikely, as signs of slowing inflation and a potential weakening of the labour market have reinforced bets on an early interest rate cut by the Federal Reserve (Fed) in September. This marks a significant divergence from Japan's expectations, which should continue to favour the Japanese yen with lower yields and hold back any attempts at a recovery in the USD/JPY pair.

Trading recommendation: SELL 143.50, SL 143.70, TP 142.60

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