No significant events are expected today.

The USDJPY pair is trading around the 155.70 mark in the early hours of Friday’s Asian session. Renewed demand for the US dollar (USD) is lifting the pair. However, verbal intervention and hawkish comments from the Bank of Japan (BOJ) Governor Kadsuo Ueda may limit the decline of the Japanese yen (JPY) at the moment.

On Thursday, San Francisco Fed President Mary Daly stated that the central bank may need more time to return inflation to target levels as uncertainty about inflation in the coming months has increased. Other Fed officials this week have also indicated they are in favor of keeping rates at their current level for a longer period. This, in turn, could lead to a rise in the dollar’s exchange rate and create tailwinds for USD/JPY.

Financial markets expect the US central bank to maintain its policy through the end of the year as it seeks “greater confidence” in inflation, with Fed Chair Jerome Powell emphasizing that achieving this confidence may take longer than expected.

Bank of Japan Governor Kazuo Ueda said on Thursday that the central bank will closely monitor the recent weakness of the yen in determining monetary policy, according to Reuters. Hawkish comments have raised expectations of an increase in short-term borrowing costs in the coming months, providing some support for the Japanese yen and leading to a decline in the USD/JPY exchange rate yesterday. Verbal intervention by Japanese authorities is likely to limit the pair’s growth in the near term. On Friday, Japanese Finance Minister Shunichi Suzuki reiterated that necessary measures will be taken regarding foreign currency if needed.

Recommendations: Trading predominantly with buy orders from the current price level.