USDJPY: SELL 147.00, SL 148.20, TP 144.60 | 09 April 2025

USDJPY:

The Japanese Yen (JPY) rose against its US counterpart during Tuesday's Asian session and for the moment appears to have paused a sharp pullback from the previous day's multi-month peak. Despite growing concerns that harsher retaliatory tariffs from the US could negatively impact the Japanese economy, signs of rising inflation in Japan keep the possibility of further interest rate hikes by the Bank of Japan (BoJ) in 2025 alive. This, in turn, is seen as a key factor that continues to support the Japanese Yen.

In addition, fears of disruption to the global economy caused by US President Donald Trump's retaliatory tariffs favour the yen's relative safe haven status. Meanwhile, traders are factoring in the possibility that a slowdown in the US economy caused by the tariffs could force the Federal Reserve (Fed) to make aggressive interest rate cuts. This is very much at odds with the Bank of Japan's hawkish expectations, halting the two-day recovery of the US Dollar (USD) from multi-month lows and putting further pressure on the low-yielding Japanese Yen.

Trade recommendation: SELL 147.00, SL 148.20, TP 144.60

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