USDJPY: BUY 144.80, SL 144.60, TP 145.80 | 08 July 2025

USDJPY:

The Japanese yen (JPY) is falling against the US dollar at the start of the new week following the release of weak domestic data. Real wages in Japan fell for the fifth consecutive month in May, with the rate of decline being the fastest in nearly two years amid ongoing inflationary pressure. Added to this are looming US tariffs on Japanese exports, which could reduce corporate profits and potentially undermine future wage growth. This prospect could complicate the Bank of Japan's monetary policy normalisation schedule and hinder the yen's appreciation.

Meanwhile, Israel's strikes on three Yemeni ports on Monday morning maintain geopolitical risks and should have a positive impact on the yen's status as a relatively safe currency. In addition, growing recognition that the Bank of Japan will raise interest rates again may deter bears from aggressively betting on a decline in the yen. On the contrary, bulls on the US dollar (USD) remain on the sidelines amid bets that the Federal Reserve (Fed) will resume its cycle of rate cuts in the near future. This, in turn, should help limit the growth of the USD/JPY pair amid the lack of significant macroeconomic data.

Trading recommendation: BUY 144.80, SL 144.60, TP 145.80

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