After a drop the previous day, the USD/JPY pair saw buying pressure in the Tokyo market. Additionally, a meeting between former President Trump and the President of Mexico raised hopes that excessive tariffs might be avoided. This led to a risk-on mood, weakening the yen. As a result, USD/JPY rose nearly 1 yen, from 151 to 151.95.
With the Thanksgiving holiday in the U.S., many USD/JPY positions were cleared, and price movements are expected to gradually narrow.
However, caution is needed. If the market becomes more confident that the Bank of Japan might raise interest rates in December, while the Federal Reserve may lower rates, the shrinking interest rate difference could create downward pressure on USD/JPY, increasing risks for a drop.
Forecasted Range for USD/JPY: 152.00 – 150.80
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