Fundamental Market Analysis for November 12, 2024 USDJPY

The Japanese Yen (JPY) managed to strengthen slightly against its US counterpart in Tuesday's Asian session, but looks like it could weaken further. Japan's fragile minority government is expected to make it difficult for the Bank of Japan (BoJ) to tighten monetary policy. Moreover, the BoJ's summary of opinions from its October meeting showed that policymakers were divided on whether to raise interest rates again. This, along with fears of President-elect Donald Trump's tariffs returning, is putting pressure on the Japanese yen.

Trump's policies and corporate tax cuts should put upward pressure on inflation, which could limit the Federal Reserve's (Fed) ability to ease policy. This, in turn, supports rising US Treasury yields and confirms a negative outlook for the low-yielding JPY in the near term. The US Dollar (USD), on the other hand, maintains the positive trend that followed Trump's victory in the US presidential election and suggests that the path of least resistance for the USD/JPY pair remains to the upside.

Trading recommendation: Trade predominantly with Buy orders from the current price level.