.jpg)
- The Japanese yen is drifting in the least fears that the Trump tariff will affect the industries of Japan.
- The policy expectations that the dies disparate should reduce the deep loss of JPY with a low return.
- Traders may also refrain from placing aggressive bets before the Trump tariff was announced.
The Japanese yen (JPY) remains on his background against his American counterpart through the Asian session on Wednesday, on the back of concerns about the possible economic repercussions of the commercial tariffs of US President Donald Trump. Regardless of this, a general tone is generally seen around the stock markets as it undermines the safe JPY. However, merchants seem to hesitate to put aggressive, aggressive stakes around JPY and choose to wait for the Trump administration’s mutual tariff later today.
Moreover, acceptance of the increasing market that the Bank of Japan (BOJ) will increase interest rates amid signs of expansion of inflation in Japan provides some support to JPY. Meanwhile, BOJ Falcons’ expectations were characterized by a great difference compared to the bets that indicate that Federal Reserve (Fed) will resume the price cutting course in June. This can act as the back wind of a low -yield JPY, which, along with the USD dollar price (USD), contributes to determining the upward trend of the USD/JPY pair.
The Japanese yen is under the fears that the Trump tariff can affect the economy
- Asian stock markets tracked overnight gains in Wall Street before announcing the imminent mutual definitions of US President Donald Trump on Wednesday, undermining the Japanese yen safe.
- Meanwhile, Trump intermittently hopes that the drawings are limited to a smaller group of countries with greater trade imbalances, and said on Sunday that the so -called mutual definitions will mainly include all countries.
- Moreover, fears that the new fees will have a long -term impact on the main industries in Japan that forced investors to expand their expectations that the bank of Japan raised the policy price at a faster rate.
- However, received macro data, including strong consumer enlargement numbers from Tokyo, which was released last Friday, keeps the door open to more interest rates by BOJ and helps reduce the deep losses of JPY.
- The federal reserve, on the other hand, is still in an uncomfortable position against the background of high prices and slow commercial activity, which means that the economy can go towards stagnation.
- Fears were provided with more data that shows that the manufacturing sector that was contracted for the first time three months ago and enlarged in the factory gate jumped to the highest level in nearly three years.
- In fact, the ISM Manufacturing Manager Index (PMI) has decreased to 49 from 50.3 in February. Moreover, the employment index highlights a decrease in salary statements in the sector at an accelerated pace.
- In addition, jobs and work circulation survey (Jolts) revealed that the number of job opportunities on the last working day in February reached 7.56 million, a decrease of 7.76 million in January.
- The markets are currently pricing in the possibility of the Federal Reserve to reduce borrowing costs by 80 basis points by the end of this year, which fails to help the US dollar attract any meaningful buyers.
- Meanwhile, the different expectations of BoJ can increase the difference between Japan and the United States. This, in turn, should limit low -yap and CAP USD/JPY losses.
- Traders are now looking at the US economist Docket on Wednesday-which includes the ADP report on the employment of the private sector and the factory orders-for some motivation before the Trump tariff was announced.
USD/JPY looks weak; The collapse of the emerging direction channel remains in the game
From a technical perspective, the dollar/JPY pair appears less flexibility than the SMA 100 (SMA) since the beginning of this week. You can prefer the subsequent movement of the bossy traders, although neutral vibrations guarantee some caution. Moreover, the last collapse below a multi -week upward channel makes it wisdom awaiting the purchase of strong follow -up before determining the location of any meaningful gains.
Meanwhile, it can be a weekly high, around the area of 150.25, as an immediate obstacle. The ongoing power can raise the pair of the dollar/JPY until 150.75-150.80 obstacles, towards the mark of 151.00. This is followed by the highest monthly oscillation in March, in about 151.30 regions and SMA technically significantly, which was currently linked near the 151.60 area, which can recover instant prices 152.00 marks and climb to more than 152.45-152.50 on its way to SMA 100 days, about 153.00 round people.
On the other side, SMA 100 periods in 4 hours table,, All over the area of 149.30-149.25, followed by a mark 149.00 and the 148.70 region, or low weekly swing, can provide support to a USD/JPY pair. However, a convincing break below will be considered a new operator for the dumpling traders and makes the immediate prices vulnerable to resuming the firm lower direction it has witnessed during the past three months or so.
Common questions between the Bank of Japan
Japan Bank is the Japanese Central Bank, which sets the monetary policy in the country. Its mandate is to issue banknotes, currency implementation and monetary control to ensure price stability, which means the purpose of inflation is about 2 %.
The Bank of Japan began a very monetary policy in 2013 to stimulate the economy and enlarge fuel in a low -inflation environment. The bank’s policy depends on quantitative and qualitative mitigation, or print notes to buy assets such as government bonds or companies to provide liquidity. In 2016, the bank doubled its strategy and increased the policy of alleviating it by providing negative interest rates first, and then directly controls the return of its government bonds for 10 years. In March 2024, BOJ raised interest rates, and effectively retreated from the high -drawing monetary policy position.
The massive incentive of the bank caused a decrease in its decrease against its main peers. This process was exacerbated in 2022 and 2023 due to the increased difference of policy between the Bank of Japan and other major central banks, which chose to increase interest rates sharply to fight high inflation levels. BOJ policy has expanded teams with other currencies, which pulled the yen value. This trend was partially reflected in 2024, when BOJ decided to give up the position of the superior policy.
The weakest yen and the increase in global energy prices increased Japanese inflation, which exceeded the BOJ goal by 2 %. The possibility of high salaries in the country – a major element in inflation in feeding – also contributed to this step.
