- In response to tariff-block news, the Japanese yen weakens the entire board on Thursday.
- The USD benefits on Wednesday’s Hawkish FOMC for minutes and supports the USD/JPY pair.
- Divisions Boj-Fed Policy Expectations keep a lid on any further profit for the currency pair.
The Japanese Yen (JPY) on Thursday cures at least two weeks against a widely strong US dollar (USD) during the Asian season, although it lacks a fast sentence. An American federal court has blocked President Donald Trump’s “Liberation Day” tariff, which promotes investors’s trust and triggers a new wave of global risk-trade. This continues to reduce the demand for traditional safe-heaven assets including JPY.
In addition, worry about debt load in Japan is to weigh at JPY. On the other hand, USD, Wednesday’s Hawkish FOMC benefits from minutes, which contributes to the bid tone of the USD/JPY pair for the fourth straight day. Traders, however, are still pricing in the possibility that the fed will further reduce the cost of lending. This is a larger deviation compared to the expectations of Hawkish Bank of Japan (BOJ) and helps limit damage to low yield jPY.
Japanese yen maintains its heavy offering tone as tariff news reduces the demand for safe-horn assets
- US President Donald Trump’s proposed mutual trade tariff was blocked by the International Trade Court on Wednesday. The court ruled that the President ended his authority by putting tariffs on goods from almost every country in the world.
- A sense of global risk gets a strong lift following a court order, with Wall Street Futures and Equality across Asia growing rapidly on Thursday. It reduces the demand for traditional safe-hevan assets including Japanese yen during the Asian season.
- On Wednesday, the demand for Japan’s longest-tenner Bond auction became the lowest since July and concerns about the fiscal health of the economy. This further drive flows away from JPY and pushes the USD/JPY pair high for the fourth straight day.
- Meanwhile, traders have been priced at the possibility that Japan’s bank in Japan will again increase interest rates this year. Therefore, on Friday, the Tokyo Consumer Price Index will be focused on the release.
- The minutes of the Federal Reserve’s May 6-7 policy meeting released on Wednesday, revealing a consensus to maintain the waiting-and-looking approach on the interest rates amidst the economic approach and uncertainty about the trade policies. Outlook supports the US dollar.
- The fedwatch tool of the CME group, however, indicates a major possibility that the US Central Bank may still cut at least two 25 base point rates this year. This is a larger deviation compared to Hawkish Boj Expectations and in favor of JPY Bulls.
- The market participants are now ready for Thursday’s US economic docks – in which the initial Q1 GDP print, general weekly initial unemployed claims and pending home sales data are released. This, with fedspeaks, can affect the demand for USD.
The USD/JPY struggles to find acceptance above 146.00 points, or 61.8% FIBO. Return level
From a technical point of view, the USD/JPY pair stops its strong intrade near a 50% retracement level of the recent downfall from the monthly peak between the recalgile power index (RSI) on the hour chart per hour. He said, “On the daily chart, the oslateers have just started receiving positive traction and have supported the possibilities for the expansion of the weekly uptrend.” Therefore, any corrective pullback below 145.35 region, or 38.2% fibonacci retracement level can be seen as a purchase opportunity and is limited to the 145.00 psychological mark. The latter is near the 200-hour chart near the 200-period simple moving average (SMA), which will deny the nearest positive if broken, if broken. Outlook,
On the other hand, USD/JPY Bulls can now wait for continuous strength and acceptance above 146.00 points before making fresh bets. Spot prices can accelerate positive steps for the next relevant barrier near 146.70-146.75 Intermediate Hurdal N route 147.00 round figure and 147.60 supply area. Some follow-three purchases should allow the currency pair to move beyond a mark of 148.00, towards the monthly swing high, around 148.65 area.
Japanese yen fAQ
Japanese Yen (JPY) is one of the world’s most trading currencies. Its value is broadly determined by the performance of the Japanese economy, but especially the policy of the bank of Japan, the difference between the Japanese and American bond yields, or the risk feeling between traders, among other factors.
One of the mandate of Bank of Japan is currency control, so its tricks are important for Yen. The BOJ has sometimes intervened directly into the money markets, usually to reduce the value of the yen, although it often refrains from doing so due to the political concerns of its main trading partners. BIJ Ultra-Luz Monetary Policy between 2013 and 2024 depreciated Yen against its main currency peers due to increasing policy deviation between Bank of Japan and other main central banks. Recently, the Yen has been unknowingly supported some of this ultra-lux policy.
In the last decade, BOJ’s attitude of Ultra-Luz monetary policy has given rise to a comprehensive policy deviation with other central banks, especially with the American Federal Reserve. This supported widening the difference between a 10 -year -old US and the Japanese bonds, which supported the US dollar against the Japanese Yen. The decision of BOJ in 2024 is gradually reducing this difference, with cutting interest-rate cut in other major central banks, to gradually abandon the ultra-lux policy.
The Japanese yen is often seen as a safe-hevan investment. This means that in the time of market stress, investors are more likely to invest their money in Japanese currency due to their reliability and stability. In turbulent times, the value of the yen against other currencies is likely to strengthen, which is more risky to invest.
