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
Summary
Urgency
Analytic
Irina Yanina
Start trade
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

EUR/USD. Analysis and Forecast

Today, the EUR/USD pair is attempting to attract buyers. Despite the European Central Bank's decision on Thursday to leave interest rates unchanged, the euro is facing headwinds due to ongoing

Irina Yanina 13:20 2025-07-25 UTC+2

No Unity of Opinion Within the ECB Yet

Yesterday, the European Central Bank kept interest rates unchanged, citing risks stemming from the trade war with the U.S., the strong euro, and rising government spending. According to Governing Council

Jakub Novak 11:59 2025-07-25 UTC+2

ECB Leaves Rates Unchanged

Yesterday, many were watching how the European Central Bank would act under current conditions, as the economy still requires stimulus, but inflationary risks prevent further easing. Following the meeting, President

Jakub Novak 11:36 2025-07-25 UTC+2

The Market Has Chosen a Win-Win Strategy

The U.S. stock market has shaken off its fears completely. The VIX volatility index has plunged to its lowest level since early February, while the S&P

Marek Petkovich 11:15 2025-07-25 UTC+2

Will Trump Succeed in Forcing Powell to Do His Bidding? (Potential for a Bitcoin Decline and a Rise in #NDX)

The U.S. president is fully implementing his aggressive policy toward everyone and everything — both in foreign and domestic affairs. While his actions toward trade partners are more or less

Pati Gani 09:57 2025-07-25 UTC+2

What to Pay Attention to on July 25? A Breakdown of Fundamental Events for Beginners

There are relatively few macroeconomic reports scheduled for Friday, but all of them are quite important. In Germany, the IFO Business Climate Index will be released — the least significant

Paolo Greco 06:43 2025-07-25 UTC+2

GBP/USD Overview – July 25: No Sign of De-escalation Yet

On Thursday, the GBP/USD currency pair pulled back slightly, but this strengthening of the dollar has no real impact on the overall picture. The British pound has corrected in recent

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD Overview – July 25: The ECB Meeting Did Not Change the Balance of Power Between the Dollar and the Euro

The EUR/USD currency pair continued to move upward on Thursday. There were several macroeconomic events scheduled for the day, and they did provoke a small market reaction

Paolo Greco 04:17 2025-07-25 UTC+2

EUR/USD: ECB's "Hawkish Pause" and Conflicting Macroeconomic Reports

The results of the ECB July meeting provided slight support for the euro. However, contradictory macroeconomic reports and anticipation of the outcome of the US-EU negotiations played a restraining role

Irina Manzenko 00:50 2025-07-25 UTC+2

The Euro Outsmarted the "Bears"

There was no "sell the fact" reaction. One of the reasons behind the recent EUR/USD rally was the expectation that the deposit rate would be held at 2% following

Marek Petkovich 00:50 2025-07-25 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.