The data released by Japan's Statistics Bureau on Friday indicates that the Consumer Price Index (CPI) in the Tokyo metropolitan area increased by 2.6% year-over-year in August, down from 2.9%. Concurrently, the core CPI in Tokyo rose by 2.5% year-over-year, also below the previous 2.9%, aligning with market expectations. As of August 29, 2025, Tokyo's core CPI declined to 2.5% year-over-year, consistent with market forecasts. The Bank of Japan (BoJ) monitors Tokyo's CPI excluding fresh food and energy, which rose by 3.0% in August, slightly below the previous 3.1%. The inflation report in Tokyo sustains market expectations of a potential resumption of interest rate hikes by the BoJ, supporting the Japanese yen. According to a Reuters survey of economists conducted in August, nearly two-thirds anticipate the BoJ will implement at least a 25 basis point rate increase later this year, with this expectation having increased over the past two weeks.

The Q2 preliminary estimate of the U.S. Gross Domestic Product (GDP) indicates an annualized growth rate of 3.3%, surpassing the prior estimate of 3.0%, highlighting a robust rebound from the sluggish Q1. Initial unemployment insurance claims last week declined to 229,000, suggesting that despite softening employment growth, the labor market remains resilient; continued claims slightly decreased to 1.95 million. The Personal Consumption Expenditures (PCE) Price Index, released concurrently with GDP, was marginally revised downward to 2.0% for the Q2, while the core PCE remained steady at 2.5%, underscoring persistent underlying inflationary pressures. The strong economic indicators have contributed to a rebound in the U.S. dollar.

In the 1H timeframe, the USDJPY price oscillates around the Bollinger Bands' upper and lower bands, currently consolidating near the middle band. Following a golden cross in the MACD, the MACD line and signal line have reverted to around the zero-axis, with the RSI at 54, indicating a neutral market sentiment and potential for a trend reversal. A decisive break above the middle Bollinger Band could propel the price toward the EMA200 and previous resistance levels at approximately 147.46 and 148.18; failure to do so may lead to a decline toward 145.8. In the 1W timeframe, the Bollinger Bands are narrowing, with price oscillating around the middle band. After a MACD golden cross, the MACD line and signal line have pulled back toward the zero-axis, and the RSI stands at 49, reflecting a predominantly sideways trend with imminent potential for a trend shift. The key focus is on whether the price can hold above the middle Bollinger Band; a successful hold could lead to an upward breakout beyond 150, while failure might see a decline toward 146. In the short term, the strategy is to go short initially and then go long.

Trading Direction: Sell

Entry Price: 147.4

Target Price: 146.2

Stop Loss: 148.6

Support: 145.8, 142.6, 141.6

Resistance: 148.5, 149.6, 151