Event to watch today:
15:15 EET. USD - ADP Employment Change
17:00 EET. USD - ISM Services Business Activity Index
USDJPY:
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The yen is strengthening on Wednesday, 26 November 2025, following reports that the Bank of Japan is prepared to consider a rate hike as early as December and amid discussions of measures aimed at containing inflation risks. The narrowing of rate‑expectations differentials with the US is reducing the appeal of long USD/JPY positions, while the possibility of official comments on the FX market during a low‑liquidity period is deterring participants from increasing USD/JPY longs.
A modest improvement in risk appetite following well-received JGB auctions reduces demand for the dollar as a refuge and supports a yen recovery. Additionally, year-end seasonality—repatriation flows and exporters’ dollar selling—strengthens resistance to further USDJPY gains, especially in the absence of fresh, strong U.S. drivers.
Risks to short positions include a sudden rebound in U.S. yields or signs that Japan’s normalization is delayed, which could push the pair back above 156. Even so, the balance of factors (yield spread, BoJ policy, seasonal yen support) favors selling on rallies with predefined loss limits.
Trading recommendation: SELL 155.55, SL 155.85, TP 154.65
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