The Best Trading Opportunities for 2025: A Deep Dive into USD/JPY and NZD Trends

The current financial landscape is presenting a unique opportunity, especially for 2025. Could one of the most promising trades right now be on the USD/JPY pair? While the US dollar has been strong, Japan’s economy is showing signs of strength that could lead to significant shifts in monetary policy.

For years, Japan’s central bank has maintained a zero or negative interest rate policy. However, with recent improvements in GDP and inflation, the Bank of Japan (BoJ) is expected to start raising rates gradually likely 25 basis points at a time. This marks a big shift, as higher rates will attract more capital to Japan, strengthening the yen.

Meanwhile, the US Federal Reserve has been on a dovish path. With inflation coming down and the labor market stabilising, another rate cut is expected, making the US dollar less attractive. As US monetary policy remains neutral to dovish, the yen could strengthen, and USD/JPY would likely fall.

In this scenario, shorting USD/JPY is a potential trade. The carry trade—which saw investors borrowing yen to fund higher-yielding investments—is reversing. As Japan raises rates and the US cuts them, the yen becomes more appealing, making this an ideal time for a short position.

Alongside this, the Reserve Bank of New Zealand (RBNZ) is expected to announce a 50-basis point rate cut, which could weigh on the New Zealand dollar. If the RBNZ follows through, pairing the New Zealand dollar with a stronger Canadian dollar could present a solid trading opportunity.

Always remember to manage your risk and adjust positions as new information comes in.

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