USDJPY Insight

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Key Points
- Regarding the ceasefire, Ukraine is calling for a summit while Russia is demanding a memorandum outlining the principles and timeline for resolution, leading to a stalemate.
- The Reserve Bank of Australia cut its benchmark interest rate by 25 basis points from 4.10% to 3.85%. Governor Michele Bullock revealed that a 50bp cut was also discussed during the monetary policy meeting.
- Concerns over the U.S. fiscal deficit have intensified, pushing Treasury yields higher, as the tax-cut-inclusive budget is unlikely to pass in this week’s plenary session due to political disagreements.

Key Economic Events This Week
+ May 21: UK April Consumer Price Index
+ May 22: U.S. May Manufacturing PMI, U.S. May Services PMI
+ May 23: Germany Q1 GDP

USDJPY Chart Analysis
The USDJPY surged near the 149 level but reversed direction and fell to the 144 level. However, with a support line forming around 144, the pair is expected to regain upward momentum from this point. If the rebound scenario plays out, a rise toward the 151 level is anticipated. That said, if the 144 level is broken, there is potential for a further drop to the 140 level, so this alternative scenario should also be considered.

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