No major events are expected today.

The yen has stabilized around 156 after the Tokyo inflation report, which remains in line with the Bank of Japan’s gradual move towards policy normalization. Increased communication from authorities regarding the inadmissibility of excessive currency fluctuations continues to curb speculative pressure on the pair’s rise, while talks of potential yield adjustments in JGBs are narrowing the differential with the US. Against this backdrop, market participants are less willing to increase long positions in USDJPY at highs.

From the US side, the conditions for a sharp dollar strengthening are limited: expectations about the Fed’s trajectory remain balanced, and risk appetite is unstable. During such periods, investors traditionally use the yen as a hedging tool, especially when the likelihood of actions from Japanese authorities is considered higher. This creates an opportunity for a gradual correction of the pair downward in the absence of strong new catalysts from the US.

Given the current balance of factors, a selling strategy seems appropriate: enter at 156.35 with a stop at 157.05 and a target at 154.25. This scenario is based on a combination of fundamental drivers — stable inflation in Tokyo relative to the target, BoJ’s readiness for further normalization steps, and the risk of verbal/factual interventions if the yen’s weakening accelerates.

Recommendations: SELL 156.35, SL 157.05, TP 154.25