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- Japanese yen stops a short pause amid concerns about the economic repercussions of the Trump tariff.
- The risk mood and the relatively hawk expectations can restore a bullish tone for JPY.
- The bias of selling the US dollar contributes to defining the US dollar/JPY before issuing the decisive American NFP report.
Japanese edges (JPY) is lower during the Asian session on Friday, amid concerns about the potential economic repercussions of the mutual tariff for US President Donald Trump. Fears forced investors to expand their bets that the Bank of Japan (BOJ) will raise interest rates at a faster pace and undermine JPY. However, the signs of expansion of inflation in Japan keep the door open to further tightening policy by BOJ.
This, along with the prevailing risk environment, can provide some support to the safe JPY. Regardless of this, the US dollar continuing (USD), backed by expectations that the Trump tariff will lead to an American recession and believes that the Federal Reserve (Fed) will resume the price cutting course soon, must contribute to determining the pair of the dollar/JPY. Traders may also choose to wait for the salary salary report (NFP) in the United States.
The Japanese yen proves support from the risk -inspired Trump mood, and BoJ’s different expectations
- In a major blow to the auto industry in Japan, which represents about 3 % of GDP, US President Donald Trump’s tariff by 25 % on car imports is the effect as scheduled on Thursday. Moreover, the Bank of Japan has declined to raise early interest rates, amid fears that the mutual tariff in the United States announced on Wednesday may negatively affect the Japanese economy.
- The return on Japanese government bonds started for a period of 10 years on Thursday, when it has spread its largest decline since August 5, has reached its lowest level since February 26. This, in turn, is seen during the Japanese yen during the Asian session on Friday and assisting the dollar pair/JPY to record a recovery from the lowest level since October.
- Meanwhile, Japanese Prime Minister Shigro Ishiba said on Thursday that he would not hesitate to deal directly with US President Donald Trump, if appropriate, and will continue to demand the United States to review the measures of customs tariffs. Separately, Japanese Finance Minister Shunici Kato warned earlier on Friday that the customs tariff could have a significant impact on global trade and economies.
- Boj Kazuo Ueda said that Trump’s tariff is likely to put down pressure on Japan and global economies, although the emphasis that BOJ will directly direct monetary policy from the point of view of achieving the goal of inflation by 2 %. The deputy governor of the Boj Shinichi Uchida team said that the central bank will raise interest rates if the basic inflation increases.
- This comes over the strong consumer enlargement numbers in Tokyo on Friday, which supports the issue for further emphasizing by BOJ. In contrast, traders increase expectations for the Federal Reserve to start reducing borrowing costs again in June and reducing interest rates four times this year amid fears that Trump’s policies will lead to a comprehensive trade war and global recession.
- The expectations, in turn, led to the recession during the night in the revenues of the US Treasury, which led to the withdrawal of the return on the US government’s support for 10 years and the US dollar to its lowest level since October. This may maintain a cover at an attempt to recover for the USD/JPY. Traders may also choose to wait for the release of US monthly recruitment details before putting aggressive bets.
USD/JPY looks like to extend the additional downside below the 145.00 brand, towards 144.50-144.45 support
From a technical perspective, the collapse was looked at overnight than the lowest level in the previous year, about 146.55-146.50, as a new operator of the US dollar bears/JPY. Moreover, the oscillators on the daily graph hold deeply in the negative lands and are still far from being in the sale area. This, in turn, indicates that a lower -resistant path of instant prices remains on the negative side and supports the additional additional moves. Consequently, the subsequent decrease under the hypocrite decrease during the night, all over the region 145.20-145.15 on its way to the 145.00 mark and the next appropriate support near the 144.50-144.45 region, appears to be a distinctive possibility.
On the other hand, any attempt to restore over the area of 146.50-146.55 (the lowest YTD level) is likely to attract fresh sellers and remains heading near the round shape 147.00. However, the ongoing power that exceeds the latter may lead to a short crowd and raise the USD/JPY pair to Aqaba 147.75-147.80. This is closely followed by the 148.00 mark, which if it is decisively wiped, the road must pave the way for additional gains towards the intermediate barrier 148.60 on the way to the 149.00 mark and the horizontal area 149.20.
Japanese questions yen
The Japanese yen (JPY) is one of the most trading currencies in the world. Its value is widely determined by the performance of the Japanese economy, but more specifically through the policy of the Bank of Japan, and the differential between the revenues of Japanese and American bonds, or risk morale among merchants, among other factors.
One of the states of the Bank of Japan is the control of the currency, so its movements are the key to the yen. BOJ interfered directly in the currency markets sometimes, and generally to reduce the value of the yen, although it refrains from doing so often due to the political concerns of its main commercial partners. Boj Ultra-LOOSE’s monetary policy between 2013 and 2024 caused the yen to decrease against its main peers due to the difference in policy between the Bank of Japan and other major central banks. Recently, relaxation has gradually gave this super -support policy some support for the yen.
Over the past decade, the BoJ’s position of adhering to a high -minded monetary policy has has expanded a difference in politics with other central banks, especially with the American Federal Reserve. This is to support the expansion of the difference between American and Japanese bonds for a period of 10 years, which preferred the US dollar against the Japanese yen. BOJ’s decision in 2024 to gradually abandon the policy of the super taste, as well as discounts in the interest rate in other major central banks, narrows this difference.
The Japanese yen is often seen as a safe investment. This means that in times of stress on the market, investors are likely to put their money in the Japanese currency because of its reliability and supposed stability. Distinguished times are likely to enhance the value of the yen against other currencies that are seen as more dangerous for investment.
