Important events today:

05.12 14:00 UTC: USD – University of Michigan Consumer Sentiment Index

The pair remains below 155.50 amid growing expectations that the Bank of Japan may approach policy normalization steps, while market participants are anticipating a rate cut by the Fed in December. Rising Japanese government bond yields and signs of increasing sensitivity from the regulator to domestic inflation are strengthening support for the yen.

The narrowing of the expected US-Japan yield premium reduces the differential and makes long positions in the dollar less attractive. Another factor is the global cooling of the dollar, which reduces pressure on Asian currencies. Given the current news backdrop, the likelihood of further yen strengthening remains high, and attempts for upward retracements in USDJPY are typically met with selling.

Key risks include a possible revision of expectations for the Fed toward a more cautious rate cut and sudden signals from the Bank of Japan for a pause. Nevertheless, the balance of fundamental factors still favors a decline in the pair.

Recommendations: SELL 155.05, SL 155.35, TP 154.20.