The Japanese yen weakens as the discouraging salary growth data mode

• The Japanese yen weakens in reaction to the weakest data on the growth of national wages.
• Geopolitical risks and divergent expectations between the BOJ and the Fed should limit the losses of the JPY.
• The bassist feeling of the USD could contribute even more to limit the USD/JPY pair.

The Japanese Yen (JPY) slides down against his US counterpart at the beginning of a new week after the publication of weaker national data. Real wages in Japan fell for the fifth consecutive month in May, at a faster rate in almost two years amid persistent inflationary pressures. This adds to the imminent US tariffs on Japanese exports, which could press corporate profits and potentially undermine future salary growth. The perspectives could complicate the normalization schedule of the monetary policy of the BOJ and act as a wind against the JPY.

Meanwhile, Israeli attacks to three Yemeni ports early on Monday maintain the geopolitical risks at stake and should benefit JPY’s relative refuge status. In addition, the growing acceptance that the BOJ will raise interest rates could stop JPY bassists to make aggressive bets. In contrast, the Alcistas of the US dollar (USD) remain behind the middle of the bets that the Federal Reserve (Fed) will resume its cycle of feat cuts in the near future. This, in turn, should contribute to limit the Usd/JPY pair in the absence of relevant macro data.

The Japanese Yen attracts some vendors as Japan’s real wages fall more than in almost two years

• The Israeli army carried out intense attacks on huti objectives in three Yemeni ports and an energy plant early on Monday in response to repeated attacks by the group aligned with Iran against Israel. This is the first Israeli attack A Yemen in almost a month and should boost the flows to Japanese and safe refuge.
• Government data published earlier today showed that nominal wages in Japan increased by 1% in May 2025 compared to the previous year, marking the third consecutive month of deceleration and remaining well below market expectations. This was also the weakest growth since March 2024 in the midst of a 18.7% drop in special bonus payments.
• In addition, real -adjusted real salaries recorded the highest drop in 20 months and fell a 2.9% year -on -year in May compared to a revised 2.0% drop in the previous month. Meanwhile, the consumer inflation rate that the Ministry of Labor uses to calculate real wages rose 4.0% year -on -year during the month reported.
• Data fed concerns that stagnant real income could affect consumer spending and stagnate the broader economic recovery amid greater uncertainty about the new tariffs of US President Donald Trump. This could complicate the path of the Bank of Japan towards the normalization of interest rates and limit JPY’s profits.
• The US dollar, on the other hand, struggles to register a significant recovery from a minimum of several years achieved last week amid relatively moderate expectations of the Federal Reserve. In fact, operators are valuing more than 70% probability of a rate cut in September and at least two reductions of 25 basic points this year.
• Investors now expect the publication of the Minutes of the FOMC meeting on Wednesday to obtain new clues about the Fed policy perspective and the road cuts path. This, in turn, will play a key role in influencing the short -term USD pricing dynamics and providing significant impulse to the USD/JPY torque.

The USD/JPY could accelerate the positive movement above the confluence of 144,65-144.70

An impulse beyond the confluence of 144.65-144.70-which includes the simple mobile average (SMA) of 100 periods in the 4-hour graph and the Fibonacci setback level of 38.2% of the June-Julio fall-would be seen as a key trigger for the USD/JPY bullies. The subsequent movement could allow cash prices to recover the psychological brand of 145.00 and test the offer zone of 145.25-145.30. A sustained strength beyond the latter should pave the path to the 61.8%fibonacci recoil level, around the round figure of 146.00.

On the other hand, the minimum of the Asian session, around the horizontal zone of 144.20, could offer some support before the round figure of 144.00, or the level of fibonacci setback of 23.6%. A convincing rupture below could change the bias again in favor of the bassists and drag to the USD/JPY torque towards the intermediate support of 143.45 on the route to the 143.00 mark. The downward trajectory could extend even more towards the region of 142.70-142.65, or a minimum of one month reached last Tuesday.