Key events today:

22.08 14:00 UTC: USD – Federal Reserve Chairman Jerome Powell will deliver a speech.

The USD/JPY pair is trading near the upper boundary of its range, as the yen remains weaker than most G10 currencies due to a persistent yield differential favoring the U.S. Japan’s latest inflation data came in slightly above expectations, but the market assumes the Bank of Japan will remain cautious and move gradually, avoiding policy tightening until stable signs appear that wage growth is translating into sustained consumer demand. This limits the yen’s potential for strengthening in the short term.

The U.S. side supports the pair through expectations around the Fed: even if the regulator resumes rate cuts in the fall, its rhetoric ahead of Jackson Hole is likely to remain balanced. Until new labor market and inflation data are published, the Fed has reasons to avoid making clear promises, which helps the dollar hold positions against low-yielding currencies, including JPY.

Finally, news flow from global managers points to the dominance of “buy the dip” strategies in USDJPY: moderate demand from importers, high sensitivity to UST yields, and a persistent divergence in monetary policy provide a fundamental backdrop for growth. If the current news flow persists, long positions with a tight stop look justified.

Recommendations: BUY 148.60, SL 148.00, TP 149.50.