🚦 Yen Weakness Pauses, USD/JPY Searches for Direction Around 150

Market Summary

USD/JPY: After yesterday’s yen strength, the Tokyo session saw a shift as USD/JPY dipped to the 149 level before rebounding sharply to above 150, driven by Bank of Japan Governor Ueda’s remarks. The decline in U.S. 10-year Treasury yields also paused, bolstering USD buying.
EUR: The German Ifo Business Climate Index exceeded market expectations, initially boosting the euro. However, the euro struggled to maintain gains against a stronger dollar. The market appears to have largely priced in the German election results, and expectations for new economic measures had a limited impact.

Key Points to Watch Today

U.S. Economic Indicators in Focus
- Today’s U.S. data releases include the Housing Price Index (December), S&P/Case-Shiller Home Price Index (20 cities) (December), Conference Board Consumer Confidence Index (February), and Richmond Fed Manufacturing Index (February).
- The Consumer Confidence Index is expected to dip from 104.1 to 102.5. A weaker-than-expected result could trigger USD selling.
Comments from U.S. Financial Officials
- Speeches are expected from Dallas Fed President Logan, Fed Vice Chair Barr, and Richmond Fed President Barkin.
- Any remarks highlighting weak consumer conditions could prompt market reactions.
European Session Highlights
- Key releases include Germany’s Real GDP (final) for Q4 2024 and Hong Kong’s Trade Balance (January).
- Watch for comments from ECB officials, particularly Bundesbank President Nagel and ECB Board Member Schnabel.

Trading Strategy for Today

USD/JPY: If U.S. economic data disappoints, USD selling could gain momentum. I’ll look to sell on rallies in the 150.80-151.00 range, with particular attention to the Consumer Confidence Index results.
EUR/JPY: While German economic data exceeded expectations, ongoing uncertainties around the Ukraine situation and Trump’s tariff policies keep the euro’s upside limited. Maintaining a bearish outlook.
Bitcoin: After breaking below its recent range, Bitcoin saw a significant drop. With no clear signs of a rebound, I’ll adopt a wait-and-see approach and avoid taking new positions for now.

Summary

Key Events:
- 23:00 JST: U.S. Conference Board Consumer Confidence Index (February)
- 25:00 JST: Speeches by Fed Officials (Logan, Barr, Barkin)
Trading Opportunities:
- USD/JPY: Sell on rallies (Target: 150.80-151.00)
- EUR/JPY: Maintain sell positions (Target: 157.50-158.00)
Risks to Watch:
- A strong beat in U.S. economic data, leading to sudden USD buying
- Fresh developments in the Ukraine situation or Trump tariff news

With the market likely to react strongly to the U.S. Consumer Confidence Index, it’s crucial to stay patient and only enter trades when the trend is clear. Let’s remain vigilant and seize the right opportunities!