USDJPY: SELL 145.40, SL 145.70, TP 144.30 | 23 Juni 2025

USDJPY:

The Japanese yen (JPY) strengthened slightly against the US dollar during Friday's Asian session and moved away from the monthly low reached the day before. Data released by the Japanese government showed that the annual consumer price index (CPI) in May remained well above the Bank of Japan's (BoJ) target of 2%. This confirms market expectations that the BoJ will raise interest rates again and is a key factor driving the moderate growth of the JPY.

Meanwhile, ongoing trade uncertainty and further escalation of geopolitical tensions in the Middle East continue to weigh on investor sentiment, further strengthening the JPY's status as a safe haven. In addition, the moderate decline in the US dollar (USD) is pulling the USD/JPY pair back towards the psychological level of 145.00. However, expectations that the BoJ may keep rates unchanged until the first quarter of 2026, as well as the Federal Reserve's (Fed) hawkish pause earlier this week, may limit the pair's losses.

Market participants are paying extra attention to upcoming economic releases from the US, including inflation and labor market data, which could influence the Fed's monetary policy trajectory. If the statistics prove strong, this could strengthen the dollar and put pressure on the yen. However, the continuing weakness in the global economic recovery and high Japanese inflation continue to support expectations of a gradual tightening of BoJ policy, creating an ambiguous outlook for the USD/JPY exchange rate in the short term.

Trading recommendation: SELL 145.40, SL 145.70, TP 144.30

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