- The Japanese Yen attracts new buyers as a higher CPI report reaffirms the betting of Boj’s rates.
- The hopes of an early commercial agreement between the US and Japan and a weaker USD weigh even more about the USD/JPY.
- The fundamental background of JPY supports the most deep losses perspectives for the torque.
The Japanese Yen (JPY) rose on Friday after the publication of higher consumer inflation figures in Japan, which keeps open the possibility of more increases in interest rates by the Bank of Japan (BOJ). However, investors seem convinced that those responsible for the policy will evaluate tariffs and commercial flows before taking their next movement. However, this marks a great divergence compared to the bets that the Federal Reserve (FED) will reduce the costs of loans in 2025. This contributes even more to the superior performance of the JPY in front of its US counterpart.
Meanwhile, commercial negotiations between the US and Japan seem to be advancing as officials continue to meet regularly. In fact, the main tariff negotiator of Japan, Ryosei Akazawa, intends to visit USA around May 30 for another round of conversations with the Trump administration. This generates hopes of an early commercial agreement and is considered another factor that supports the JPY. In addition, the appearance of new US dollar sales (USD) does not help the USD/JPY to capitalize on the moderate rebound of the previous day from the 142.80 region, or a minimum of more than two weeks.
The Japanese yen benefits from the strongest domestic consumer figures and expectations of a more aggressive box
- The data published by the Japan Statistics Office on Friday showed that the National Consumer Price Index (IPC) rose 3.6% year -on -year in April. More details revealed that the underlying national CPI, which excludes the volatile prices of fresh food, reached 3.5% year -on -year in April compared to the previous 3.2% and 3.4% expected.
- In addition, an indicator that excludes both the prices of fresh food and energy, and that is closely followed by the Bank of Japan, rose to 3% interannual from the previous 2.9%. To this is added that the expectations that the highest wages will boost prices should maintain pressure on the BOJ to continue increasing interest rates.
- In fact, BOJ officials recently showed willing to increase interest rates even more if the economy and prices improve how it is projected. In contrast, the operators increased their bets for additional cuts of interest rates by the Federal Reserve after the CPI (consumer price index) and the IPP (production price index) softest last week.
- The “One Big, Beautiful Bill” by US President Donald Trump was approved by the House of Representatives on Thursday and addresses the Senate for approval. If it exceeds that obstacle and becomes law, the broad tax cut and the expense bill could worsen the US budget deficit at a faster rate than expected.
- The China Ministry of Commerce warned Wednesday on legal actions against individuals or organizations that implement US export restrictions on Huawei’s processors. This highlights the persistent tensions between the two largest economies in the world despite a preliminary trade agreement reached in Geneva earlier this month.
- Meanwhile, the stagnation revives the fears of an economic slowdown in the US, which, in turn, does not help the US dollar to capitalize on Thursday’s profits led by optimistic macroeconomic data from the US of the USA of the US Labor (DOL) still resistant.
- In addition, a preliminary report published by S&P Global showed that the US composed production rate rose to 52.1 in May from 50.6 in the previous month. The PMI of services increased to 52.3, compared to April 50.8, reaching a maximum of two months, while the manufacturing PMI was 52.3.
- In the Geopolitical Front, the Israel Army continued to bombard the Gaza Strip and block the desperately necessary food aid. In addition, Trump supposedly told European leaders that Russian President Vladimir Putin is not ready to end war since he thinks he is winning, which he should support JPY as a safe refuge.
- Friday’s economic agenda of Friday includes the publication of data on sales of new homes, although the approach will be in the Speeches of FOMC influential members, which will boost the demand of USD and the USD/JPY’s pair. However, the fundamental background suggests that the path of lower resistance for cash prices is down.
The USD/JPY seems vulnerable after Thursday’s rejection near the support-confluence of 144.35-144.40 converted into resistance
The failure of the previous night near the point of confluence support of 144.40, which includes the 50% recoil level of the rebound of April-May and the simple mobile average (SMA) of 200 periods in the 4-hour graph, and the subsequent fall, favors the bearish operators. This, together with negative oscillators in schedules/day graphics, validates the short -term negative perspective for the USD/JPY torque.
From the current levels, the area of ​​143.25, or the 61.8%fibonacci recoil level, could offer some support before the round figure of 143.00. This is followed by the region of 142.80, or a minimum of more than two weeks reached on Thursday, below which the USD/JPY torque could accelerate the fall towards the following relevant support near the area of ​​142.40-142.35 before falling to the level of 142.00.
On the other hand, a sustained fortress beyond the confluence of support-resistance of 144.35-144.40 could trigger a short coverage movement and raise the USD/JPY torque at the psychological level of 145.00. This is followed by the obstacle of 145.35-145.40, or the recoil level of 38.2% of Fibonacci, which if it is exceeded decisively could change the short-term bias in favor of the upward operators.
Economic indicator
National Food and Energy IPC (Yoy)
This report, published by Statistics Bureauit is a measure of the movement of the prices obtained from the comparison of retail prices of a basket of the representative purchase of goods and services excluding fresh food and the energy sector. It is an indicator of inflation in Japan and is the most significant way of measuring purchase trends. Food and energy are excluded in order to make a more successful calculation of prices in the country. Thus, the purchasing power of the YEN is diminished when inflation increases, so that a reading superior to the anticipated is upward to the YEN.
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Last publication:
MARD MAY 22, 2025 23:30
Frequency:
Monthly
Current:
3%
Dear:
–
Previous:
2.9%
Fountain:
Statistics Bureau of Japan
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.