Shorts in USD/JPY continued to get squeezed, from month-end USD purchase flows to US commerce court docket’s ruling on Trump tariffs partially helped to revive some credibility to the system, which has been undermined by the unpredictability of Trump’s tariffs. Pair was final at 145.12 ranges, OCBC’s FX analysts Frances Cheung and Christopher Wong be aware.
Close to time period dangers skewed to the upside
“This aided USD’s latest rebound. Each day momentum shouldn’t be exhibiting a transparent bias whereas RSI rose. Close to time period dangers skewed to the upside however bias to fade. Resistance at 146.50, 147.10 ranges. Assist at 144.40/70 ranges (21 DMA, 23.6% fibo retracement of 2025 excessive to low), 142.50. US Core PCE knowledge danger (Friday) might even see additional unwinding, main to close time period USD/JPY upside dangers.”
“On Friday, we watch Tokyo CPI, IP, retail gross sales knowledge. Hotter than anticipated knowledge ought to curtail the latest rebound. Whereas the timing of BoJ coverage normalisation could also be deferred, coverage normalisation shouldn’t be derailed. Fed-BoJ coverage divergence and USD diversification theme ought to nonetheless assist USDJPY’s broader course of motion to the draw back.”
