The Japanese yen reverts the most soft intra -inspired losses inspired by Tokyo’s CPI

• The Japanese yen slides down after the publication of a weakest Tokyo ICC on Friday.
• Bets that the BOJ will increase interest rates further limit JPY losses.
• The USD languishes about a minimum of several years and drags to the USD/JPY torque.

The Japanese Yen (JPY) weakened on all fronts during Friday’s Asian session in reaction to the data that showed that consumer inflation in Tokyo slowed drastically in June. To this is added that Japan’s retail sales registered growth for 38th consecutive month, although to the slowest rhythm since February. This adds to the expectations that the Bank of Japan (BOJ) could delay rates ups to the first quarter of 2026, which, together with the optimism of the market, turns out to be key factors that undermine the JPY, considered safe refuge. Apart from this, the uncertainty about the impact of US tariffs on the Japanese economy becomes another factor that contributes to the low relative performance of the JPY on the last day of the week.

However, investors seem convinced that the BOJ will remain on the path of standardization of monetary policy, since inflation in Japan persistently exceeds its annual objective of 2%. This marks a significant divergence compared to the impulse of other important central banks towards a more flexible approach and could limit the losses of the JPY, which offers lower yields. The US dollar (USD), on the other hand, fights about a minimum of three and a half years amid concerns about the independence of the Federal Reserve (Fed) and bets that the US Central Bank could resume its cycle of rates cuts as soon as next month. This contributes even more to limit the profits of the USD/JPY torque, which is still on the way to registering strong weekly losses.

The Japanese yen gains ground while the weakest Tokyo CPI does not affect the rowing bets of the Boj

• The Japan Statistics Office reported Friday that the Tokyo Consumer Price Index (CPI) increased 3.1% year -on -year in June compared to 3.4% of the previous month. In addition, the underlying indicator, which excludes fresh foods, slowed from 3.6% year -on -year in May to 3.1% compared to 3.3% expected. In addition, the Tokyo CPI that excludes both fresh and energy food rose 3.1% compared to the previous year after an increase of 3.3% in May.
• A separate government report showed that retail sales in Japan fell 0.2% monthly in May compared to the 0.7% upward growth of the previous month. In annual terms, retail sales increased 2.2% during the month reported, below the increased increase of 3.5% in April and below market expectations of a 2.7% growth. The data reaffirms the expectations that the Bank of Japan could refrain from increasing interest rates in 2025.
• However, inflation in the capital of Japan remains well above the annual objective of 2% of the Central Bank. In addition, the signs of a constant increase in internal inflationary pressures keep hopes of more rates of rates by the Boj. In contrast, operators have been betting on the Federal Reserve (FED) would reduce the indebtedness costs in at least 50 basic points before the end of the year and valuing the possibility of a rates reduction in July.
• That said, the president of the Fed, Jerome Powell, maintained a waiting approach and see in future decisions about interest rates this week, which caused criticism of the US president, Donald Trump, who has been asking for lower interest rates. In addition, the reports suggest that Trump was considering appointing Powell’s successor to September or October, fueling concerns about the possible erosion of the independence of the Fed and undermining the US dollar.
• Apart from this, the final estimate of the Department of Commerce published on Thursday showed that the US economy contracted at an annual rate of 0.5% from January to March. This represents a more pronounced drop than -0.2% informed in the second estimate and was driven by a weaker consumer expense, which increased only 0.5%, or the slowest rhythm since 2020, drastically falling from the growth of 1.2% previously informed.
• Meanwhile, the weekly applications for unemployment subsidy in the US fell to a total of 236K in 10k during the week that ended on June 21. However, continuous applications for unemployment subsidy increased by 37K to reach 1,974 million, or the highest level since November 2021, for the week that ended on June 14. This eclipsed the greatest increase in the orders of durable goods since July 2014 and kept the depressed USD near its lowest level since March 2022.
• Investors now expect the publication of the US Personal Consumption Expenditure Index (PCE) – The preferred inflation indicator of the Fed. The key data will be observed to obtain clues about the trajectory of fees of fees of the Fed, which, in turn, will play a key role in the influence of the USD’s pricing dynamics in the short term and will provide a significant impulse to the USD/JPY.

USD/JPY remains vulnerable below the 200 periods in H4

From a technical perspective, the upward movement of the USD/JPY on Friday struggles to find acceptance over a support converted into an obstacle marked by the simple mobile average (SMA) of 200 periods in the 4 -hour graph and falters near the region of 144.80. Since the oscillators in the 4 -hour/day graphics have begun to gain negative traction, some additional weakness below the 144.00 mark could make cash prices vulnerable to fall further below the 143.75 area, or the minimum of the previous night. The descending trajectory could eventually drag cash prices to levels below 143.00.

On the contrary, a sustained force above the 200 SMA, which leads to a subsequent fortress above the 145.00 psychological brand and the static barrier of 145.25-145.35, could deny the bearish perspective. The USD/JPY torque could then make a new attempt to conquer the 146.00 mark, which if it exceeds decisively should pave the path for additional short-term profits towards the region of 146.70-146.75 and the round figure of 147.00.