The Japanese yen has posted strong gains for a second straight day. In the North American session, USD/JPY is trading at 146.32, down 0.79% on the day. The yen plunged 2.1% on Monday but has now recovered those losses.
Japan's PPI eases slightly to 4%
Wholesale inflation in Japan remained high, rising 4% y/y in April. This was slightly lower than the revised 4.2% gain in March and was in line with expectations. This is the fourth straight month that PPI has been at 4% or higher, as companies continued to pass on costs to consumers. Food prices have been rising, led by rice prices which have doubled over the past 12 months.
The Bank of Japan has been carefully monitoring inflationary pressures as it looks to continue hiking interest rates on the path to monetary normalization. The BoJ raised rates in January but has stayed on the sidelines since then and is in a wait-and-see mode until there is more clarity about President Trump's tariff policy. The Bank meets next on June 17.
The 90-day tariff deal between the US and China has raised hopes that Trump will reach trade deals with China and other countries. Japan sends 20% of its exports to the US, which is Japan's largest trading partner and trade talks are underway between the two countries.
Fed in a wait-and-see mode
The US inflation report was particularly important as Trump's tariffs took effect on many products in April. Inflation rose in April but was lower than expected. The full impact of the tariffs, which could send inflation lower, may not be seen until June or July.
The Federal Reserve is also in a wait-and-see mode. At last week's Fed meeting, Fed Chair Powell pushed back against Trump, who has called for the Fed to lower rates. The Fed is widely expected to hold rates at the June 18 meeting.
USD/JPY technical
- USD/JPY has pushed below support at 147.06 and 146.64. The next support level is 145.91.
- 147.79 and 148.21 are the next resistance lines.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD struggles to retain 1.1500 as USD gains traction
EUR/USD hovers around the 1.1500 level in the American session on Friday. The US Dollar surges despite dovish comments from Fed Governor Waller, supporting a rate cut as soon as July. The mood sours as investors weigh Middle East developments.
GBP/USD dives below 1.3500 after weak UK data, resurgent USD
GBP/USD turned red for the day and approaches the 1.3450 area as the week comes to an end. Earlier in the day, the UK reported weak Retail Sales figures, although the ongoing slump seems related to renewed risk aversion fueling safe-haven US Dollar demand.
Gold surges above $3,3360 as fears kick in
Gold gathers near-term momentum and trades near $3,370 ahead of the weekly close, as risk sentiment took a turn to the south. Following a positive start, Wall Street turned south. Middle East tensions and massive back-and-forth missile exchanges between Iran and Israel seem to be behind the ongoing run to safety.
Ripple Price Prediction: How tokenized treasuries could accelerate XRP to $10 by end-2025
Ondo Finance launched tokenized treasuries on the XRP Ledger in June, paving the way for seamless institutional adoption. The market capitalization of tokenized treasuries has grown to $5.9 billion despite market uncertainty over US tariffs.
Weekly focus: War and risk of escalation weigh on market sentiment
The war between Israel and Iran and the risk of further escalation weighed on markets this week. Equity markets largely traded in red and US treasury yields slid lower. That said, markets were by no means in full risk-off sentiment.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.