Yesterday, comments from Bessent, saying “Japan needs to control its inflation problem,” led to yen buying in the Tokyo market.
The Nikkei stock index also fell, and this “risk-off” mood pushed USD/JPY down to 146.22. However, the pair stopped falling near the July 24 low of 145.86. Later, in New York trading, the U.S. July Producer Price Index (PPI) was stronger than expected, and USD/JPY rose to 147.96 by the market close. From the August 1 high of 150.91 (before the U.S. jobs report) to the recent low, the pair dropped more than 5 yen, but the rebound has been small. This shows the market still expects an early interest rate cut by the U.S. Federal Reserve (FRB).
However, yesterday’s long lower shadow on the candlestick means there may be short-term buying. If today’s U.S. retail sales data pushes the dollar higher, traders may look to sell on the rebound.
Also, because the U.S.–Russia leaders meeting is today, be careful about positions going into the weekend due to possible geopolitical risks.
USD/JPY expected range: 145.90 (BB lower limit) – 148.50 (50%)
Note: This information does not guarantee profits. Please make your own decisions when trading.