empty
25.06.2025 06:46 PM
USD/JPY: Japanese Yen Weakens Amid Declining Demand for Safe-Haven Assets

This image is no longer relevant

At the moment, the yen remains overshadowed by the U.S. dollar.From the perspective of the Bank of Japan's domestic policy, the summary of the June meeting reveals that some policymakers favor maintaining current interest rates due to uncertainty surrounding the impact of U.S. tariff wars on the Japanese economy. This exerts pressure on the yen, as the absence of new stimulus measures may reduce the currency's appeal.

However, investors lean toward the view that the Bank of Japan may still raise interest rates in the future due to signs of mounting inflationary pressure. Supporting this is the rise in the Services Producer Price Index (PPI), which has stayed above 3% year-on-year for the third consecutive month as of May. This growth could become an additional factor supporting the yen.

Bank of Japan board member Naoki Tamura noted that inflation in May rose more than expected and that the situation with U.S. tariffs is becoming less uncertain. He emphasized that if price growth continues, the central bank may be forced to act decisively. These comments reinforce expectations of potential future borrowing measures by the Bank of Japan, which could lend support to the yen.

On the other side of the pair, Federal Reserve Chair Jerome Powell stated that inflation will start to rise soon and that the central bank is in no hurry to cut rates. His comments followed recent suggestions by colleagues about a potential rate cut as early as the July meeting. However, these statements did not leave a strong impression on the dollar.

This image is no longer relevant

This creates pressure on the dollar, helping to maintain its weaker position against the yen.

The geopolitical situation remains tense: the ceasefire between Israel and Iran came into effect on Tuesday and is holding for now. However, ongoing incidents — Israeli attacks on Tehran and Iranian missile strikes — keep the risk of conflict elevated. Both sides claim victory and signal readiness to resume hostilities if necessary. These developments continue to support demand for safe-haven assets such as the yen.

Overall, the combination of domestic monetary policy, rate expectations, and geopolitical instability creates a favorable environment for sustained support for the Japanese currency.

From a technical perspective, the pair is attempting to break through resistance at 145.75. Oscillators on the daily chart remain in positive territory, confirming a bullish outlook. However, on the hourly and 4-hour charts, oscillators are mixed, so traders should exercise caution when opening new positions.

The next resistance level for the pair is around 146.30, followed by the key psychological level at 147.00. Support lies near 145.00, after which the bias may shift in favor of the bears.

Irina Yanina,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

USD/CHF. Analysis and Forecast

On Tuesday, the USD/CHF pair is under selling pressure, pulling back from the weekly high near the key psychological level of 0.8000. This decline is driven by a combination

Irina Yanina 12:47 2025-07-08 UTC+2

What to Watch on July 8th? Fundamental Events Overview for Beginners

No macroeconomic publications are scheduled for Tuesday. However, it cannot be said that the market was idle on Monday despite the lack of key macroeconomic events—there was still enough news

Paolo Greco 11:19 2025-07-08 UTC+2

Markets given breathing room as tariff deadline pushed to August

No need to panic. The market is simply cautious about the White House's return to the tariffs announced on America's Liberation Day. Donald Trump sent letters to various countries specifying

Marek Petkovich 10:14 2025-07-08 UTC+2

GBP/USD Pair Overview on July 8, 2025

The GBP/USD pair declined slightly on Monday, but it's still premature to speak of a downtrend. From a technical standpoint, the pair remains below the moving average line; however

Paolo Greco 08:55 2025-07-08 UTC+2

EUR/USD Review on July 8, 2025

The EUR/USD currency pair traded with a downward bias throughout Monday, although there were likely no solid reasons for the dollar to strengthen again. Let's recall that over the weekend

Paolo Greco 08:37 2025-07-08 UTC+2

GBP/JPY. Analysis and Forecast

During the European session on Monday, the GBP/JPY currency pair is approaching the 198.30 level. The pair finds some support from UK housing data: in June, house prices rose

Irina Yanina 19:40 2025-07-07 UTC+2

XAU/USD. Geopolitical Risks May Provide Additional Support to the Safe-Haven Precious Metal

Today, gold is displaying an intraday bearish tone despite rebounding from the $3300 level. Strengthening demand for the US dollar remains the primary factor pressuring gold, limiting its upward movement

Irina Yanina 19:09 2025-07-07 UTC+2

Bitcoin leads turbulent life

Beneath the calm surface of BTC/USD lie turbulent underwater currents that are reshaping the cryptocurrency market structure. Still waters run deep. On the surface, it seems that life

Marek Petkovich 15:48 2025-07-07 UTC+2

USD/JPY. Analysis and Forecast

The USD/JPY pair maintains a bullish bias, staying above the psychological level of 145.00, reflecting intraday selling pressure on the Japanese yen amid U.S. dollar strength. Investors are concerned that

Irina Yanina 12:59 2025-07-07 UTC+2

USD/CAD. Analysis and Forecast

On Monday, the USD/CAD pair continued its upward movement for the second day in a row. This rise is driven by a combination of factors. Crude oil prices initially declined

Irina Yanina 12:39 2025-07-07 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.