Japanese Yen Dips Amid Trade Optimism and Weak Domestic Data
Yen Weakening as Trade Tensions Ease
The Japanese Yen (JPY) is trading lower for the second day in a row, weighed down by a positive global outlook and disappointing domestic economic figures. The US Dollar (USD) is gaining strength, pushing the USD/JPY pair back above 142.00.
Easing US-China trade tensions and President Trump’s flexibility on tariffs for US carmakers are contributing to a generally upbeat market mood. This is making the safe-haven Yen less attractive to investors.
Japan’s Economy Shows Signs of Slowdown
Adding to the Yen’s woes, Japan’s Industrial Production fell more than expected in March, and Retail Sales also missed forecasts. These figures suggest that Japan’s economy might be slowing down.
BoJ Decision in Focus
Traders are holding back on making big bets ahead of the Bank of Japan’s (BoJ) policy meeting on Thursday. The central bank is expected to keep interest rates steady for now, but there are mixed signals about its future policy direction. While inflationary pressures are building in Japan, concerns about the impact of US tariffs on growth could lead the BoJ to remain cautious.
In contrast, the Federal Reserve (Fed) is widely expected to cut interest rates soon, which could further strengthen the USD.
Technical Outlook for USD/JPY
From a technical perspective, the USD/JPY pair faces immediate resistance at 142.60-142.65. If this level is broken decisively, the pair could rise towards 143.00 and beyond. However, if the pair falls below 142.00, it could drop towards 141.00 and even lower.
