Important events today:

12:30 UTC: USD – Initial Jobless Claims.

The Japanese yen (JPY) continues to lose ground against the US dollar (USD) on Thursday after correcting intraday gains. This decline may be related to comments by Bank of Japan (BoJ) Deputy Governor Shinichi Uchida, who stated on Wednesday: “We will not raise rates when markets are unstable,” according to Reuters.

The Bank of Japan’s Summary of Opinions following the July 30-31 monetary policy meeting showed that several Bank members believe economic activity and prices are developing in line with the Bank of Japan’s expectations. As a mid-term goal, the Bank of Japan members are targeting a neutral rate of “at least around 1%.”

The decline in the safe-haven yen’s rate may be limited due to increased risk-off sentiment amid rising tensions in the Middle East. According to two US intelligence officials, Iran and its allies are preparing for potential retaliatory measures against Israel following the recent killings of a senior Iranian military commander in Tehran, a Hezbollah leader in Lebanon, and a senior Hamas leader, reports CNN.

The US dollar (USD) faces challenges as traders anticipate a deeper rate cut by the US Federal Reserve (Fed) in September. According to the CME FedWatch tool, the probability of a 50 basis point (bps) Fed rate cut in September is 72.0%, compared to 11.8% a week earlier.

Recommendations: Predominantly trade Buy orders from the current price levels.