USDJPY: SELL 143.10, SL 143.90, TP 142.20 | 02 July 2025

Event to pay attention to today:

01.07 16:30 EET. USD - Federal Reserve Chairman Jerome Powell Speaks

01.07 16:30 EET. JPY - BOJ Governor Kazuo Ueda Speaks

01.07 17:00 EET. USD - ISM Manufacturing PMI

USDJPY:

The Japanese yen (JPY) rose to a near three-week high against a weakened US dollar (USD) during Tuesday's Asian session and looks set to rise further. The Bank of Japan (BoJ) Tankan survey showed that business confidence of major manufacturers in Japan improved for the first time in two quarters between April and June. Moreover, companies expect consumer prices to remain above the central bank's 2% annualized target for the next five years. This reinforces the case for further interest rate hikes by the Bank of Japan and is a key factor supporting the JPY.

At the same time, yen bulls seemed unaffected by US President Donald Trump's hints of higher tariffs on Japan, which Japan's chief trade negotiator Ryosei Akazawa said would cause significant damage to the country's economy. On the other hand, the US dollar hit a new low since February 2022 amid growing confidence that the Federal Reserve (Fed) will resume its rate-cutting cycle in the near future. This represents a significant divergence from the Bank of Japan's stance, pushing the USD/JPY pair below the mid-143.00s and reaffirming the positive outlook for the low-yielding yen.

Trade recommendation: SELL 143.10, SL 143.90, TP 142.20

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