USD/JPY Trade Setups Amid Fed & BoJ Policy ShiftsUS Inflation & Federal Reserve (Fed) Policy:
Market consensus anticipates higher month-over-month (M/M) inflation but lower year-over-year (Y/Y) inflation, suggesting that price pressures remain elevated in the short term but may stabilise over the medium term. Given these dynamics, the Fed is expected maintain a cautious stance—balancing inflation control with economic stability.
Federal Reserve (Fed) Sentiment:
Federal Reserve Chair Jerome Powell will likely adopt a neutral stance in upcoming comments, as medium- to long-term tariff implications remain undefined. However, given the Fed’s data-driven approach, markets may interpret any slight tilt towards caution as dovish, leading to near-term USD weakness.
Bank of Japan (BoJ) Outlook:
The BoJ maintains a medium-term hawkish bias as it looks to raise interest rates to combat domestic inflation gradually. While no immediate policy changes are expected, recent statements from BoJ officials suggest a preference for tightening later in 2024 if inflation remains persistent.
Trade Idea Bearish Case
Entry: Sell on rejection at 154.000 – 155.000
Stop-Loss: Above 155.500
Take-Profit: 152.000
Risk Management: 1:2
Trade Idea Bullish Case
Entry: Buy on retracement to 152.500 – 152.000
Stop-Loss: Below 151.800
Take-Profit: 154.000
Risk Management: 1:2
