No important events are expected today.

The yen remains near multi-year lows as the interest rate differential continues to stimulate operations in favor of the dollar. The Bank of Japan is forced to consider risks to the economy and the debt market, so expectations of rapid policy tightening are limited. Additional pressure on the Japanese currency is created by high costs for imported energy resources.

From the US side, support for the USD-JPY pair is provided by steady employment figures and a recovery in Treasury yields after a recent decline. At the same time, rising geopolitical tensions increase demand for the dollar, which combines defensive properties with a higher yield. The slowdown of inflation in the US reduced the likelihood of an early Fed rate hike, but the yield differential remains wide for now.

The main constraint on the pair’s growth is the risk of action by Japanese authorities. The Ministry of Finance has reiterated its readiness to respond to excessive currency movements, and previous interventions show that a sharp strengthening of the dollar could trigger countermeasures. However, without confirmed actions, this risk does not outweigh the interest rate factor, so the base scenario allows for a cautious rise in USD-JPY.

Recommendations: BUY 162.40, SL 162.10, TP 163.00.