Japan Jena reflects from a multi -commercial low USD level; growth potential seems restricted

Japanese yen attracts some secure flows on Wednesday among the weaker risk tone.
National political uncertainty and reduced BOJ rate may limit profits for JPA.
The expectations that the FED will maintain increased rates should support USD and USD/JPy.

Japan Jen (JPY) regains several pips from the lowest level since the beginning of April, which have affected their American counterpart earlier on Wednesday, although any further movement seems elusive. In the background of trade uncertainties, a reduction in the chances of immediately lowering the rate by the Federal Reserve (FED) weighs the mood of investors. This, in turn, drives some secure flows towards JPA, which, together with the modest US dollar (USD), does not support the USD/JPY pair in building the end of the Mark outside the mark 149.00.

Meanwhile, investors now seem to be convinced that the Bank of Japan (Bij) will give up raising interest rates this year due to the fears of economic fall from the higher American tariffs. In addition, national political uncertainty before the election to the Chamber of Councilors on July 20 may stop JPy Bulls from placing aggressive plants. In addition, the expectations that the Fed would delay the reduction of interest rates at the back of a diminutive inflation in the US, conducive to USD bulls and supporting the prospects of the appearance of some buying immersion around the USD/JPY pair.

Japanese Jena Bulls become cautious due to the revival of secure demand

Recent polls indicate that the ruling Japanese coalition – the ruling coalition of the Liberal Democratic Party (LDP) and Komeito – may lose the majority in the higher elections in the Chamber planned for July 20. This can escalate both fiscal and political risks in Japan and complicate commercial negotiations among the American duties.
US President Donald Trump last week raised concerns about the trade war and issued notifications to key commercial partners, including Japan, outlining individual tariff rates from August 1. Japan is standing in front of the penalty 25% tariff for all exports to America among detained US-Japan commercial negotiations, especially on the protection of the rice market in Japan.
This happens when economic growth in Japan slows down. By adding to this, decreasing real wages and signs of cooling inflationary pressure can additionally complicate the schedule of normalization of the monetary policy of the Bank Japan, which turns out to be a key factor of the American dollar delicate from the dollar.
Traders have established their factories for a reduction in the rate by the Federal Reserve this month after the report on work in June June Utbeat. In addition, the data published on Tuesday showed that consumer prices in the US increased the most in five months, confirming market expectations that the federal reserve would remain on the side until September.
Work statistics in the US announced that the consumer price rate (CPI) increased in June by 0.3%, and the annual rate accelerated to 2.7% from 2.4% in May. Meanwhile, the basic meter, which excludes fluctuations in the cost of food and energy, increased by 2.9% from 2.8% earlier, increasing the profitability of treasury bonds to their highest levels for several weeks.
President Boston Fed, Susan Collins, noticed that it is challenging to determine the monetary policy at the moment among uncertainty, and the solid economy gives the American central bank to take on another interest rate traffic. Tariffs can escalate inflation in the second half of 2025 and push the core inflation to about 3% until the end of the year, added Boston.
Separately, President Dallas Fed Lorie Logan said that the basic thing is that monetary policy must stick to for a while to bring inflation. Logan added that tariff increases seem to cause additional inflation pressure for some time, and the early reduction of the rate by the FED risks deeper economic scars on a longer way to price stability.
Traders are now waiting for the American manufacturer’s price index to be released, which was later to be determined during the North American session. In addition, the comments of influential FOMC members will run a few USD and USD/JPY. Meanwhile, the basic background suggests that the path of the lowest resistance for a couple is an advantage.

Constructive technical configuration of USD/JPY supports the case of buying immersion

From a technical point of view, accommodation for the night of 148.00 (peak of June) and a subsequent passage outside May High, around 148.65, can be seen as a fresh trigger for Bulls USD/JPy. After saying, the relative force indicator (RSI) approached 70 characters on the daily chart. Therefore, it will be reasonable to wait for tiny -term consolidation or modest withdrawal before positioning for any further appreciation of traffic.

In the meantime, the repair slide now seems to find support near the region 148.65, below Couple USD/JPY It can move to a round number 148.00. Any further decline can be seen as an opportunity to buy and remain cushioned near the horizontal zone 147.60-147.55. The latter should act as a key key point, which, if it is broken, can lead to technical sale and drag point prices to the sign 147.00 on the way to support 146.30-146.25.

On the other hand, continuous strength and acceptance of the 149.00 figure can raise a pair of USD/JPA to the next significant obstacle near the region 149.35-149.40. The shoot can develop further, although it is more likely that it will have a stiff resistance near the psychological sign 150.00.

FAQ tariff

Tariffs are customs duties taken for some imports of goods or product category. The tariffs are designed to support local producers to be more competitive on the market, providing price advantage compared to similar goods that can be imported. The tariffs are widely used as tools of protectionism, along with trade barriers and import amounts.

Although both tariffs and taxes generate government income to finance public goods and services, they have several distinctions. The tariffs are paid at the entrance port and the taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and companies, and the tariffs are paid by importers.

There are two schools of thinking among economists regarding the exploit of tariffs. While some say that tariffs are necessary to protect national industries and solve the problem of commercial imbalance, others perceive them as a harmful tool that can potentially escalate prices in the long-term perspective and lead to a harmful trade war by encouraging Tit-For Tatt tariffs.

During the fall to the presidential election in November 2024, Donald Trump explained that he was going to exploit the tariffs to support the US and American producers. In 2024, Mexico, China and Canada constituted 42% of total US imports. According to the American office of the population, Mexico was distinguished as the best exporter by $ 466.6 billion. That is why Trump wants to focus on these three nations by applying tariffs. It also plans to exploit revenues generated by tariffs to reduce personal income taxes.