Key events today:

01.08 12:30 UTC: USD – Non-Farm Employment Change
01.08 14:00 UTC: USD – ISM Manufacturing Index

The yen weakens following the Bank of Japan meeting: the central bank kept the interest rate near 0.50% and raised its inflation forecast, but signaled an extremely cautious path toward further tightening — any steps are postponed to a later period, contingent on stable price growth. This “dovish” stance, combined with high U.S. interest rates, supports a yield differential in favor of the dollar and fuels demand for USD against JPY.

Additional momentum for the pair comes from U.S. developments: the Fed’s decision to hold rates without hinting at a pivot, along with new American tariffs, strengthened the dollar index and demand for dollar liquidity. Meanwhile, Japanese authorities continue verbal interventions, warning about undesirable currency fluctuations, but no concrete actions have been taken — allowing markets to test higher USDJPY levels.

External conditions remain mixed: industrial activity in Asia deteriorated in July, posing a medium-term challenge for Japanese exports. However, a partial easing of tariff uncertainty following bilateral agreements with the U.S. reduces the risk of trade shocks. Under these circumstances, the preferred strategy is “buy the dip” as long as the rate differential and news flow support the dollar.

Recommendation: BUY 150.70, SL 150.15, TP 151.75.