- The Japanese yen is still depressed while commercial uncertainties moderate the rowing bets of the Boj.
- The JPY bulls fail to obtain relief from a weakest USD and the impulse of risk aversion.
- The fundamental background supports the case for an additional upward movement of the USD/JPY.
The Japanese yen (JPY) goes back against a weaker US dollar (USD) for the second consecutive day and slides to a minimum of more than two weeks during the Asian session on Tuesday. The president of the United States, Donald Trump, climbed the commercial war and announced that his administration would impose a 25% tariff to the imported goods of Japan, effective as of August 1. In addition, the weak salary growth data published from Japan on Monday could further complicate the path of the Bank of Japan (BOJ) towards the normalization of monetary policy and turn out to be a key factor that weighs on the JPY.
The JPY bundles seem quite little impressed and largely ignored the data that showed that the Japan’s current account surplus increased more than expected, to ¥ 3,436.4 billion in May 2025 from ¥ 2,949.5 billion a year earlier. Meanwhile, concerns about the economic impact of Trump tariffs and geopolitical risks derived from new conflicts in the Middle East moderate the appetite of investors for higher risk assets. This is evident in a red sea in global stock markets, which could support the safe and limit the USD/JPY torque in the middle of a new sale of the USD.
Japanese yen bassists seek
- The president of the United States, Donald Trump, launched the first lot of letters that delineate higher commercial tariffs against a series of important economies and imposed a tax of 25% to Japan. However, Trump extended the deadline for the imposition of new tariffs until August 1, leaving the door open for more commercial negotiations.
- Japanese Prime Minister Shigeru Ihiba said early on Tuesday that the US had proposed to continue the conversations until the new term of August 1. Japan has not been able to reach an agreement with the USA because the country has continued to defend what you need to be defended, added ishiba.
- The government data published on Monday showed that the growth of nominal wages in Japan slowed for the third consecutive month in May 2025 and real -adjusted real salaries registered the greatest fall in 20 months. This supports the case for the caution of the Bank of Japan in the short term.
- Investors were cautious about the possible economic impact of Trump’s reciprocal tariffs, which triggered a new wave of global risk aversion. This could limit the losses for the Yen of Seguro Refuge, which, together with the appearance of new US dollar sales, should limit the USD/JPY torque.
- In the context of a solid report of non -agricultural payrolls of the US on Friday, the expectations that Trump’s tariffs would support inflation in the US in the coming months could force the Federal Reserve to maintain stable interest rates. This, in turn, favors the USD bulls before the FOMC minutes on Wednesday.
The USD/JPY finds acceptance above the 100 -day SMA; seems prepared to upload more
From a technical perspective, the USD/JPY torque seems to build on the impulse beyond the single mobile average (SMA) of 100 days. Since the oscillators in the daily chart have been gaining positive traction, some tracking purchases beyond the peak of the Asian session, around the 146.45 region, they should allow cash prices to recover the round figure of 147.00. The impulse could extend even more towards the intermediate obstacle of 147.60 en route to the maximum month of June, around the 148.00 mark.
On the contrary, corrective setbacks could now find some support around the horizontal zone of 145.65-145.60. Any additional fall could be seen as a purchase opportunity and remain limited near the psychological brand of 145.00. The latter should act as a key point, which if it breaks decisively could drag to the USD/JPY torque towards the following relevant support near the 144.35-144.30 area on the route to the round figure of 144.00.
Tariffs – Frequently Questions
Although tariffs and taxes generate government income to finance public goods and services, they have several distinctions. Tariffs are paid in advance in the entrance port, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, while tariffs are paid by importers.
There are two schools of thought among economists regarding the use of tariffs. While some argue that tariffs are necessary to protect national industries and address commercial imbalances, others see them as a harmful tool that could potentially increase long -term prices and bring to a harmful commercial war by promoting reciprocal tariffs.
During the election campaign for the presidential elections of November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy. In 2024, Mexico, China and Canada represented 42% of the total US imports in this period, Mexico stood out as the main exporter with 466.6 billion dollars, according to the US Census Office, therefore, Trump wants to focus on these three nations by imposing tariffs. It also plans to use the income generated through tariffs to reduce personal income taxes.
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.
