USDJPY: SELL 144.50, SL 145.40, TP 143.50 | 10 April 2025

Events to pay attention to today:

09:15 EET. JPY - BOJ Governor Kazuo Ueda Speaks

21:00 EET. USD - FOMC Meeting Minutes

USDJPY:

The Japanese Yen (JPY) has continued to be a popular investment choice for the second consecutive day on Wednesday, as investors seek the traditional safety of this currency amid concerns about a global recession triggered by tariffs. Reports that US President Donald Trump has agreed to meet Japanese officials to initiate trade discussions following a phone call with Japan's Prime Minister Shigeru Ishiba have led to increased optimism about a possible US-Japan trade deal. This, coupled with the anticipation that the Bank of Japan (BoJ) will persist in its endeavours to elevate interest rates, underpinned by a broadening domestic inflation, further reinforces the JPY.

In contrast, the BoJ's hawkish stance marks a significant deviation from the Federal Reserve's (Fed) expectations of more aggressive interest rate cuts. This divergence is expected to result in a narrowing of the rate differential between Japan and the US, which is another factor driving flows towards the lower-yielding JPY. Additionally, the prevailing USD selling bias is driving the USD/JPY pair closer to the 145.00 psychological mark during the Asian session. In the lead-up to the US consumer inflation figures on Thursday, traders are now looking to the FOMC meeting minutes for direction.

Trade recommendation: SELL 144.50, SL 145.40, TP 143.50

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