Japanese Yen Attempts Stabilization Amid Tariff Pressures and BoJ Caution

Japanese Yen Steady as Trade Tensions Linger, BoJ Meeting in Focus

Thursday, July 10 – The Japanese Yen (JPY) is trading flat, showing signs of stabilization after recent softness driven by renewed global trade tensions and policy uncertainty ahead of the Bank of Japan (BoJ) meeting later this month.

JPY Stabilizes After Early July Weakness

The Yen started July on a softer note as investors reacted to the US announcement of 25% tariffs set to begin August 1. This development weighed on the JPY, traditionally seen as a safe-haven currency, though recent moves show an attempt at a technical recovery.

Political Developments Could Shift Momentum

“There is hope in the possibility of an eleventh-hour agreement after the July 20 upper house elections in Japan,” analysts note, suggesting that political clarity could prompt renewed trade discussions and ease pressure on the Yen.

Such a scenario would likely support risk sentiment and improve the outlook for the Japanese currency.

BoJ Expected to Hold in July 31 Meeting

Trade volatility has become a key consideration for the BoJ, which has retreated from tightening policy amid rising external risks. Markets currently price in a policy hold at the upcoming July 31 BoJ meeting, with little expectation for major moves unless trade tensions worsen substantially.

Outlook: Range-Bound But Sensitive

While the JPY remains range-bound, its path forward is highly dependent on:

• Developments in US-Japan trade negotiations
• Global risk appetite
• Central bank policy signals from both the BoJ and the Federal Reserve

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