USDJPY: SELL 143.50, SL 144.30, TP 142.40 | 01 July 2025

USDJPY:

The USD/JPY pair is attracting some sellers towards 143.85 during the Asian session on Monday. The U.S. dollar (USD) is weakening against the Japanese yen (JPY) amid rising bets for a Federal Reserve (Fed) interest rate cut.

The United States (US) and China are close to a deal on tariffs. However, U.S. President Donald Trump abruptly ended trade talks with Canada, adding uncertainty to the market's positive outlook.

In addition, traders are betting that the U.S. central bank will cut rates more frequently and possibly sooner than previously expected. Markets estimate the probability of a quarter-point Fed rate cut at nearly 92.4%, up from 70% a week earlier.

On the data side, the personal consumption expenditure (PCE) price index rose 2.3% in May, up from 2.2% in April (revised from 2.1%), the U.S. Bureau of Economic Analysis reported Friday. This value matched market expectations. Meanwhile, the core PCE price index, which excludes volatile food and energy prices, rose 2.7% in May, following a 2.6% increase (revised from 2.5%) seen in April.

On the other hand, the Bank of Japan's (BoJ) cautious stance on interest rate hikes could put pressure on the yen and create a tailwind for the pair.

Trade recommendation: SELL 143.50, SL 144.30, TP 142.40

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