The Japanese Yen advances to a new maximum of several weeks against a weaker dollar

• The Japanese yen is strengthened as the Boj tankan survey reaffirms bets for a raised rise.
• The JPY bulls largely ignored the risk appetite and commercial conversations between the US and Japan stagnated.
• Divergent policy expectations between the BOJ and the Fed weigh even more about the USD/JPY torque.

The Japanese Yen (JPY) rose to a maximum of almost three weeks against a US dollar (USD) in general weaker during the Asian session on Tuesday and seems to be prepared to appreciate even more. The Tankan Survey of the Bank of Japan (BOJ) showed that business confidence in the great manufacturers of Japan improved for the first time in two quarters during the period from April to June. In addition, companies expect consumer prices to remain above the annual 2% objective of the Central Bank over the next five years. This supports the case for more increases in interest rates on the part of the Boj and turns out to be a key factor that supports JPY.

Meanwhile, JPY’s bulls seem not to be affected by the insinuations of US President Donald Trump about more tariffs to Japan, which, according to Japan’s main commercial negotiator, Ryosei Akazawa, would cause significant damage to the economy. The USD, on the other hand, has played a new minimum since February 2022 amid the growing acceptance that the Federal Reserve (Fed) would resume its cycle of feat cuts in the near future. This marks a great divergence compared to the aggressive posture of the BOJ, dragging the USD/JPy torque below 143.00 and validating the positive perspective for the JPY of lower performance.

Japanese Yen Alcistas maintain control while BOJ’s aggressive expectations compensate for commercial concerns

• The Tankan Survey of the Bank of Japan showed on Tuesday that business trust in the great manufacturers of Japan rose to 13.0 in the second quarter from 12.0 in the first quarter, above the market consensus of 10.0. In addition, the manufacturing perspective for the second quarter reached 12.0 compared to 12.0 previous, stronger than the expected 9.0.
• More details revealed that companies expect consumer prices to increase 2.4% over the next three years and 2.3% annually over the next five years. This highlights the growing inflationary pressure in Japan, which may require the BOJ to rise even more interest rates and provide a good impulse to Japanese and asian session.
• The main negotiator of Japan, Ryosei Akazawa, returned after his seventh round of conversations in Washington without a great advance. However, Akazawa said he is still committed to reaching an agreement while protecting the economic interests of Japan. President Trump expressed frustration with stagnant trade negotiations between the US and Japan.
• Meanwhile, Trump said he could move forward with the 25% tariff on Japanese cars and also criticized Japan for his alleged lack of disposition to buy grove cultivated in the US.
• The US dollar recorded a strong 2.6% drop in June, and the vendor bias remains unchanged in the midvish expectations of the Federal Reserve. The markets are now valuing a lower probability that the next rate reduction by the Fed occurs in July and they see a probability of approximately 74% of a rate cut as soon as in September.
• Meanwhile, the Senate approved on Saturday by little a procedural vote to open the debate on the “great beautiful law” of Trump, which would add approximately 3.3 billion dollars to the federal deficit during the next decade. This contributes to the bassist feeling in the USD and exerts even more pressure on the USD/JPY torque.
• The operators now expect significant macroeconomic publications of the United States scheduled for the beginning of a new month, starting with the USM manufacturing PMI of the USA ISM and the Employment and Labor Rotation Offers Survey (Jolts) that will be published later today. However, attention will focus on the US Non -Agricultural Payroll (NFP) report on Friday.

The USD/JPY seems vulnerable to an additional drop to levels below 143.00

From a technical perspective, an intradicate fall below the minimum last week, around the region of 143.75, it could be seen as a key trigger for the bassists of the USD/JPY in the context of the recent rupture through the simple mobile average (SMA) of 200 periods in the 4 -hour graph. In addition, the oscillators in the 4 -hour and daily graphics have been gaining negative traction, suggesting that the way of lower resistance for cash prices is down. Therefore, a subsequent fall towards the level of 143.00, en route to the following relevant support near the region of 142.75-142.70, seems like a different possibility.

On the contrary, the round figure of 144.00 now seems to limit any attempt to recover. Any additional movement could be seen as a sales opportunity and limit the USD/JPY torque near the 200 periods in the 4 -hour graph, currently set near the 144.40 region. However, a sustained strength beyond the latter could trigger a short coverage rally and allow cash prices to recover the psychological level of 145.00.