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      Political Pressure Fuels Expectations of Easing, Yen Leads Decline Among Major Currencies

      Eva Chen

      Forex

      Summary:

      Over the past month, the yen has been the weakest performer among major currencies, with the USDJPY gaining nearly 3% - outpacing the U.S. Dollar Index's 0.9% rise, largely due to political pressure demanding more accommodative monetary policy.

      Buy

      USDJPY

      EXP
      Trading

      155.201

      Entry Price

      161.060

      TP

      152.500

      SL

      155.312 -0.202 -0.13%

      0

      Point

      Flat

      152.500

      SL

      CLOSING

      155.201

      Entry Price

      161.060

      TP

      Fundamentals

      The yen continued its modest decline during European trading hours, pushing the USDJPY exchange rate to its highest level since February. Bank of Japan Governor Kazuo Ueda cautioned that excessively loose monetary policy should not be maintained for an extended period.
      Bank of Japan Governor Kazuo Ueda warned that maintaining ultra-loose monetary policy for an extended period could pose risks to achieving the inflation target in a stable manner. In the minutes of his meeting with the Council on Economic and Fiscal Policy, Kazuo Ueda emphasized that achieving the 2% inflation target stably requires both pushing up inflation and preventing it from overshooting unexpectedly.
      He pointed out that “excessively accommodative policies maintained for too long carry risks,” defining the central bank's current approach as aimed at ensuring a “soft landing” while carefully assessing economic conditions.
      This meeting also marked the first time Kazuo Ueda appeared publicly alongside Prime Minister Sanae Takaichi since she assumed office. Takaichi has tended to favor loose monetary policies to stimulate economic growth, which runs counter to the Bank of Japan's current stance of gradually raising interest rates as inflation trends exceed its long-term 2% target.
      Political Pressure Fuels Expectations of Easing, Yen Leads Decline Among Major Currencies_1

      Technical Analysis

      The USDJPY resumed its upward momentum after breaching the temporary high of 155.03, returning to an upward trend for the day. The current rebound from 139.87 remains intact, with the target set at the 100% retracement level of 161.06 within the 146.58 to 153.26 range. A break above this level could pave the way for a further test of the July 2024 high of 161.97.
      However, considering the bearish divergence in the 4H MACD indicator, a decisive break below the 153.60 support level would signal the formation of a short-term top and could trigger a deeper pullback, potentially testing the 55-day SMA (currently at 151.45).

      Trading Recommendations

      Trading Direction: Buy
      Entry Price: 154.78
      Target Price: 161.06
      Stop Loss: 152.50
      Valid Until: December 3, 2025 23:55:00
      Support: 154.78, 153.66, 152.88
      Resistance: 155.89, 156.78, 158.91
      Risk Warnings and Investment Disclaimers
      You understand and acknowledge that there is a high degree of risk involved in trading with strategies. Following any strategies or investment methodologies is the potential for loss. The content on the site is being provided by our contributors and analysts for information purposes only. You alone are solely responsible for determining whether any trading assets, or securities, or strategy, or any other product is suitable for you based on your investment objectives and financial situation.

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