No major events are expected today.

The Bank of Japan kept its short-term rate at 1, failing to provide the market with a new reason for sustained yen strengthening. One board member voted for an increase, and the regulator maintained the possibility of further steps if inflation risks intensify. However, the decision to leave the rate unchanged supported the recovery of USD-JPY following a sharp decline in the previous session.

The interest rate differential remains the primary factor favoring the dollar. The Fed rate sits in the 3.50–3.75 range, while the yield on US 10-year Treasury bonds remains above 4.6. Under these conditions, carry trade operations retain their appeal, whereas the absence of immediate tightening by the Bank of Japan limits demand for the yen.

The main risk for USD-JPY buy positions remains confirmed currency market interventions by Japanese authorities and the potential for repeated action upon further yen weakness. This factor could cause a sharp reversal, so the pair’s upside potential does not appear one-sided. Nevertheless, following the Bank of Japan’s decision, the current fundamental momentum remains in favor of further USD-JPY recovery.

Recommendations: BUY 160.80, SL 160.25, TP 161.90.