No Major Events Expected Today.

The yen begins the session in a stronger fundamental position following fresh inflation data from Japan. The core consumer price index rose one point eight percent year-on-year in July after one point six percent in June, while the measure excluding fresh food and fuel accelerated to one point nine percent. These data bolster expectations of a Bank of Japan rate hike in September and provide support for the Japanese currency.

The main obstacle to a stronger yen remains the wide interest rate differential between the United States and Japan. It continues to support USDJPY around one hundred fifty-nine, despite pressure on the dollar in other major pairs. However, Japanese bond yields have risen noticeably, and expectations of further policy tightening by the Bank of Japan are gradually diminishing the appeal of carry trade operations.

At the same time, the US dollar remains under general pressure due to investor doubts about the sustainability of US fiscal policy and the effectiveness of Treasury measures in the bond market. For USDJPY, this combines weak dollar momentum with a fresh local bullish factor for the yen. The interest rate spread may limit the downside, but if the current backdrop persists, the base-case scenario allows for a downward movement in the pair.

Recommendations: SELL 159.10, SL 159.45, TP 158.25.