Important events today:

21.11 14:45 UTC: USD – Composite PMI

The yen continues to weaken due to the Bank of Japan’s persistently soft stance and expectations of fiscal support measures. Officials signal the need to maintain accommodative conditions, while discussions of a support package fuel risk appetite and pressure on the yen. With Japanese yields remaining low, the rate differential with the U.S. persists, making yen-based funding cheap and supporting USD/JPY demand. Market participants consider the risk of interventions, but without a policy shift, their impact remains limited.

In the U.S., recent labor market reports showed strong job creation alongside moderate unemployment, keeping the economy on a stable path. The dollar index remains above 100, reflecting continued interest in the currency as a safe-haven asset. Treasury yields stay elevated, and the rate gap with Japan drives capital flows into dollar assets, supporting the upward trend in USD/JPY. Ongoing budget uncertainties also sustain caution and demand for the dollar.

With the Bank of Japan’s dovish stance and solid U.S. data, the base scenario favors further upside in the pair. We expect buying from 157.25 with appropriate risk control. Potential shifts may occur if Japanese inflation accelerates or the BOJ signals readiness to allow yields to rise. In the short term, ministerial comments and evaluations of the support package are important; sharp interventions by the Ministry of Finance remain a key risk.

Recommendation: BUY 157.25, SL 156.75, TP 158.25