No significant events are expected today.

The Japanese yen (JPY) attracted new buyers during the Asian session on Friday following hawkish remarks from Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, who stated that the core inflation rate is gradually rising toward the 2% target. Uchida’s comments reinforce expectations that the Bank of Japan will continue raising interest rates this year, which helps offset weaker-than-expected Tokyo Consumer Price Index (CPI) data and provides a slight boost to the yen. Additionally, the risk-off sentiment is seen as another factor supporting the yen’s status as a safe-haven currency.

Meanwhile, the wave of risk aversion is triggering a further decline in US Treasury bond yields. As a result, the narrowing interest rate differential between the US and Japan encourages capital flows towards the lower-yielding yen. This, along with weak price dynamics in the US dollar (USD), causes the USD/JPY pair to retreat below the mid-149.00 range. However, traders seem reluctant to place aggressive directional bets and prefer to stay on the sidelines ahead of the release of the US Personal Consumption Expenditures (PCE) price index, which will play a key role in determining the dollar’s price action.

Recommendations: Sell 149.20, SL 149.70, TP 148.40.