USDJPY: SELL 149.50, SL 150.40, TP 148.00 | 19 March 2025

USDJPY:

The Japanese yen (JPY) declined against its US counterpart for the third consecutive day on Tuesday, lifting the USD/JPY pair to a near two-week high, above the mid-149.00s during the Asian session. Investors continue to cheer China's latest stimulus measures to boost domestic consumption and incomes. In addition, hopes for a peace agreement on Ukraine ahead of talks between US President Donald Trump and Russian President Vladimir Putin continue to keep the market optimistic. This, along with some reallocation of trading positions ahead of key central bank events this week, is undermining the safe-haven yen.

However, strengthening expectations that the Bank of Japan (BoJ) will continue to raise interest rates this year, bolstered by positive results from the spring Shunto wage talks, may deter JPY bears from aggressive betting. In addition, the recent narrowing of the differential between Japanese and US rates amid expectations that the Federal Reserve (Fed) will lower borrowing costs several times this year should help limit deeper JPY losses. This, along with bearish sentiment around the US Dollar (USD), could keep the USD/JPY pairing in check ahead of the crucial Bank of Japan and Fed meetings that begin today.

Trade recommendation: SELL 149.50, SL 150.40, TP 148.00

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