This Week's Market Strategy - February 25, 2025 (Tue)

Last week, USD/JPY was sold off following comments from two BOJ VIPs. Hawkish BOJ board member Takada and BOJ Governor Ueda. With these two hawkish remarks, USD/JPY quickly hit lows in the upper 148 yen range. However, from last week through this week, the high for USD/JPY was 152.394 yen on Monday the 17th, and the low was yesterday at 148.846 yen—a relatively modest 2.50 yen range. However, with the seemingly solid 150 yen level breached, USD/JPY is likely to test lower downside targets of 141-145 yen in the near term than initially expected. Since USD/JPY broke below 150 yen, exit position once. With the recent low from 12/3 at 148.644 yen as support, a short-term long strategy at 149.50 yen. Upper target at 153.50 yen, where a medium-term short is recommended.

WTI crude oil futures declined to $70.4 following the possibility of a Ukraine peace agreement, with a minor rebound yesterday. Iraq may add 185,000 barrels per day if the Iraq-Turkey pipeline resumes operations, suggesting continued weakness. Bull factor depends on China's economic recovery. For WTI crude, if it declines further, place stop-loss below $67 and consider a contrarian long.

Gold recorded an all-time high of $2,974 per ounce yesterday. President Trump is implementing tariff policies with a focus on "China-bashing," imposing 10% tariffs on imports from China and 25% tariffs on steel and aluminum, following existing rates, plus additional tariffs on lumber, automobiles, semiconductors, and pharmaceuticals. However, buying at this point is not recommended. For gold on a long-term basis, any break below $2,750 is a buy.