USD/JPY Holds Strong as Japanese Yen Nears Multi-Month Low
The USD/JPY pair is staying strong above 149.00, close to its lowest level since April. This clearly shows continued Japanese Yen weakness in the Forex market.
One major reason behind the Yen’s fall is the Bank of Japan’s policy. Traders believe the BoJ will not raise interest rates anytime soon. Japan’s economy is still facing slow growth, weak wages, and low inflation. So, the central bank is likely to keep its policies loose, which puts more pressure on the Yen.
Political uncertainty is also a factor. Japan’s upper-house elections are coming up on July 20, and doubts about the ruling party’s position are making investors nervous.
On the other hand, the US Dollar remains strong. Investors don’t expect the Federal Reserve to cut interest rates soon. High inflation in the US and strong economic data have pushed up Treasury yields, helping the Dollar stay firm.
Adding to the Yen’s troubles, new US tariffs on some Japanese goods have created fresh concerns about trade. This could hurt Japan’s economy even more.
With these factors combined, USD/JPY remains bullish in the short term.
Impact:
USD/JPY could possibly rise above 150 if the US Dollar stays strong. The Yen may remain weak unless the BoJ changes its policy or inflation in Japan picks up.