The Japanese Yen falls to a minimum of almost a week in front of the USD after the new Trump tariffs

• The Japanese yen weakens even more against USD in the midst of concerns about Trump’s commercial tariffs.
• The expectations of more rates of the BOJ rates and the feeling of risk aversion could limit the losses for the jpy of safe refuge.
• The narrowing of the rate differential between the US and Japan could also contribute to limit the USD/JPY torque.

The Japanese Yen (JPY) falls in front of his American counterpart for the second consecutive day on Monday and moves away from a maximum of more than a month reached last week. The concerns about the economic repercussions of the commercial tariffs of the president of the United States, Donald Trump, to a large extent, eclipsan the summary of hard line opinions of the Bank of Japan (BOJ) and undermine the JPY. In addition to this, a generalized Rally of the US dollar (USD) pushes the USD/JPY torque towards the 156.00 zone, or a maximum of four days during the Asian session.

Meanwhile, an increase in the underlying inflation of Tokyo to the fastest annual rhythm in almost a year maintains the market expectations of new increases in interest rates by the Bank of Japan (BOJ). In addition, a new wave of risk aversion globally, together with the narrowing of interest rates differentials between Japan and the rest of the world, could offer support to the safe refuge JPY. To this is added the recent fall in the yields of the US Treasury Bonds, which could stop the USD’s bulls to make aggressive bets and limit the USD/JPY torque earnings.

The Japanese Yen is affected by concerns about the impact of Trump’s commercial tariffs

• The president of the United States, Donald Trump, signed an order on Saturday to impose 25% tariffs on imports from Canada and Mexico and 10% to China products from Tuesday.
• The Prime Minister of Canada, Justin Trudeau, the president of Mexico, Claudia Sheinbaum, and the China Ministry of Foreign Affairs responded quickly with retaliation movements.
• The US dollar is recovered in all areas and advances again towards a maximum of more than two years reached in January, which helps the USD/JPY torque to consolidate Friday’s upward movement.
• The Summary of Opinions of the Bank of Japan published Monday showed that those responsible for the policy discussed the probability of continuing to raise the rates at the January meeting.
• The members of the Boj council reiterated that it will be necessary to continue raising the rates if the economic activity and the prices are kept online, although this is recently to boost the Japanese yen.
• Japan finance minister Katsunobu Kato said that the government intends to monitor the impact of Trump’s new tariffs on their currency amid concerns about repercussions.
• The performance differential between the US and Japan remains close to a minimum of several weeks. This, together with the impulse of risk aversion, could help limit greater depreciation of the JPY in the short term.
• The operators now wait for the important macroeconomic publications of the United States scheduled for the start of a new month, starting with the ISM manufacturing PMI later today.
• However, attention will focus on the monthly US employment data, popularly known as the Non -Agricultural Payroll (NFP) report that will be published on Friday.

The USD/JPY could have difficulty capitalizing on the positive movement beyond the resistance of 156.25

From a technical perspective, the good rebound last week from the 50% setback level of the December-volume rally and the subsequent upward movement favor the upward operators. That said, any additional strength beyond the level of 156.00 could face an obstacle near the maximum last week, around the 156.25 area. A sustained fortress beyond this barrier could trigger a new wave of short coverage and raise the USD/JPY to the region of 156.70-156.75 en route to the round figure of 157.00 and the horizontal barrier of 157.60. The impulse could extend even more towards the level of 158.00, above which cash prices could aim to test the maximum of several months, around the region of 158.85-158.90 reached on January 10.

On the other hand, the psychological level of 155.00 now seems to protect the immediate fall before the horizontal zone of 154.55-154.50 and the round figure of 154.00. This is closely followed by the monthly minimum of January, around the area of ​​153.70 reached last Monday. A convincing rupture below the latter would be considered a new trigger for the bearish operators and would make the USD/JPY torque vulnerable to accelerate the fall even more towards the support of 153.30. Cash prices could eventually fall to the level of 153.00.