- The USD/JPY quotes above 144.00 while safe shelter flows boost the US dollar amid the growing tensions in the Middle East.
- The BOJ is expected to keep the stable rates, limiting the support for the Yen despite the most aggressive signs of the Governor UEDA.
- Japan and the US are preparing to meet at the G7 summit in Canada, where the two nations are expected to discuss bilateral relations and negotiate on tariffs.
The Japanese Yen (JPY) is proven weaker against the US dollar (USD) on Friday, since geopolitical tensions and divergence of policies of central banks drive market flows.
The USD/JPY has starred in a modest rebound, quoting over 144.00 at the time of writing, since the demand for the US dollar as a safe refuge increases.
The reports of Israeli attacks to Iranian nuclear facilities have raised the geopolitical risk, supporting the USD and weighing on the YEN.
Meanwhile, the expectations that the Bank of Japan (BOJ) maintain interest rates without changes in your next meeting on Tuesday have further limited JPY’s profits.
Although the governor of the Boj, Kazuo Ueda, had previously indicated the possibility of a raised rise in response to the increase in internal inflation, recent economic data suggests that Japan’s recovery remains fragile. Industrial production has slowed down, and the manufacturing sector sensitive to Japan’s exports is fighting under the pressure of high US tariffs on steel, aluminum and cars, key taxpayers to the Gross Domestic Product (GDP) of Japan.
The University of Michigan published its preliminary consumer feeling for the United States on Friday, indicating a notable increase in trust among US homes.
Meanwhile, both the index of consumer inflation expectations to one year and at five years decreased, with the perspective at one year falling to 5.1% from 6.6% and the five -year perspective decreasing to 4.1% from 4.2%. This reflected the softest readings of the expected of the Consumer Price Index (ICC) and the Production Price Index (PPI) reported at the beginning of the week, which have raised the expectations of a rate cut by the Federal Reserve in September.
However, with the widely expected Fed to maintain stable rates both in June and July, and the BOJ showing little urgency to harden even more, the current differentials of interest rates remain favorable for the rise of the USD/JPY in the short term.
Technical Analysis of the USD/JPY – Daily Graphic
The USD/JPY is quoted about 144.14 on Friday, standing just below the fibonacci setback of 23.6% of the fall from January to April in 144.37.
The pair continues to roller within a symmetrical triangle, defined by a line of descending trend since January maximum in 158.88 and an ascending support since the minimum of April 2025 in 139.89.
Both the simple mobile average (SMA) of 20 days (143.96) and the 50 -day (144.14) are converged near the current levels, highlighting the indecision and potential of a breakout. A daily closure above the resistance of the triangle and 144.37 could expose the level of 147.14 (38.2%fibonacci setback) and 149.38 (50%fibonacci decline).
In the lower part, a break below 143.00 would increase the pressure to the 141.00 area and the April minimum. The relative force index (RSI) is neutral in 49, indicating a lack of strong momentum in any direction; However, price compression suggests that a larger directional movement could be under construction.
USD/JPY DAILY GRAPH
And in Japanese faqs
The Japanese Yen (JPY) is one of the most negotiated currencies in the world. Its value is determined in general by the march of the Japanese economy, but more specifically by the policy of the Bank of Japan, the differential between the yields of the Japanese and American bonds or the feeling of risk among the operators, among other factors.
One of the mandates of the Bank of Japan is the currency control, so its movements are key to the YEN. The BOJ has intervened directly in the currency markets sometimes, generally to lower the value of YEN, although it abstains often due to the political concerns of its main commercial partners. The current ultralaxy monetary policy of the BOJ, based on mass stimuli to the economy, has caused the depreciation of the Yen in front of its main monetary peers. This process has been more recently exacerbated due to a growing divergence of policies between the Bank of Japan and other main central banks, which have chosen to abruptly increase interest rates to fight against inflation levels of decades.
The position of the Bank of Japan to maintain an ultralaxa monetary policy has caused an increase in political divergence with other central banks, particularly with the US Federal Reserve. This favors the expansion of the differential between the American and Japanese bonds to 10 years, which favors the dollar against Yen.
The Japanese Yen is usually considered a safe shelter investment. This means that in times of tension in markets, investors are more likely to put their money in the Japanese currency due to their supposed reliability and stability. In turbulent times, the Yen is likely to be revalued in front of other currencies in which it is considered more risky to invest.
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.
