The Japanese Yen (JPY) began the week positively, as US President Donald Trump's extensive retaliatory tariffs heighten the risk of a global economic slowdown and continue to support traditional safe-haven assets. Concerns that the tightening of reciprocal tariffs by the US could negatively impact the Japanese economy have led investors to reduce their expectations of a faster increase in the discount rate by the Bank of Japan (BoJ). This has led to a positive impact on the yen, with the USD/JPY pair rebounding and returning to a six-month low during the Asian session. This level is below the psychological 145.00 mark reached on Friday.
Nevertheless, signs of rising inflation in Japan keep the door open for a further BoJ interest rate hike in 2025. Additionally, ongoing geopolitical tensions are expected to limit any significant depreciation in the yen. The US Dollar (USD) is attempting to capitalise on Friday's positive movement amid bets on more aggressive Federal Reserve (Fed) policy easing, fuelled by fears of a tariff-induced slowdown in the US economy. This, along with a further sharp decline in US Treasury yields, should provide a tailwind for the low-yielding Yen and halt any meaningful recovery movement in the USD/JPY pair.
Trade recommendation: BUY 147.000, SL 145.800, TP 148.150
Nevertheless, signs of rising inflation in Japan keep the door open for a further BoJ interest rate hike in 2025. Additionally, ongoing geopolitical tensions are expected to limit any significant depreciation in the yen. The US Dollar (USD) is attempting to capitalise on Friday's positive movement amid bets on more aggressive Federal Reserve (Fed) policy easing, fuelled by fears of a tariff-induced slowdown in the US economy. This, along with a further sharp decline in US Treasury yields, should provide a tailwind for the low-yielding Yen and halt any meaningful recovery movement in the USD/JPY pair.
Trade recommendation: BUY 147.000, SL 145.800, TP 148.150
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More analytical information and promotions on FreshForex website cutt.ly/mw3aPjui
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.