Yen Weakens Amid Pressure from Trump Tariffs and BOJ Policy Direction
The Japanese Yen (JPY) continued to show weakness at the start of the European session on Tuesday (8/7), dragged down by concerns that new trade tariffs from US President Donald Trump could further complicate the Bank of Japan's (BoJ) steps in normalizing its monetary policy. The yen, which is usually a safe asset, is actually under pressure because the global market shows signs of stability, so that interest in safe havens has decreased.
The USD/JPY pair is currently holding above the psychological level of 146.00, supported by pressure on the Yen and market sentiment that is not too risk-off. Even so, the movement of this pair tends to be cautious because there are still a number of risks that hold back the JPY from weakening further, including the potential for escalation of geopolitical conflicts in the Middle East and the economic impact of aggressive US tariff policies.
From the US Dollar (USD) side, pressure is also still being felt. Although it touched a one-week high on Monday, the dollar is currently moving lower due to fiscal concerns in the US, especially after Trump signed a large spending package. This uncertainty limits further strengthening of the USD and makes market players more cautious in taking long positions on the USD/JPY pair.
For now, the market tends to wait and see. Investors are still weighing the combined impact of trade policies, geopolitics, and the direction of global interest rates. Without new catalysts, USD/JPY is likely to move in a limited range, at least until important economic data or monetary policy statements from major central banks emerge.
Source: (ayu-newsmaker)
