Japanese Yen Weakens Further as USD/JPY Hits 148.80 Amid Strong US Dollar Demand

Japanese Yen Weakens Further as USD/JPY Hits 148.80 Amid Strong US Dollar Demand

The Japanese Yen (JPY) faced continued selling pressure in early European trading on Thursday, pushing the USD/JPY currency pair to a fresh multi-week high of 148.80. A combination of weak domestic data, dovish Bank of Japan (BoJ) expectations, and renewed US Dollar (USD) strength contributed to the movement.

Japan Posts Weaker-Than-Expected Trade Surplus

The latest figures from Japan revealed a smaller-than-anticipated trade surplus for June, further undermining the JPY. The country’s export sector continues to face headwinds from US trade tariffs, slowing global growth, and declining domestic demand.

Adding to the bearish sentiment are slumping real wages, moderating inflation, and mounting political uncertainty — factors that complicate the BoJ’s already cautious stance on monetary policy normalization.

Strong US Dollar Fuels Upward Momentum

At the same time, the US Dollar remains buoyant amid growing market expectations that the Federal Reserve (Fed) will hold off on rate cuts in the near term. This perception was reinforced after President Donald Trump dismissed rumors that he would fire Fed Chair Jerome Powell, easing investor concerns and lifting risk sentiment.

The combination of reduced BoJ rate hike bets and safe-haven outflows has further fueled USD/JPY buying, pushing the pair to its highest level since June 23.

Market Outlook: USD/JPY May See Further Upside

With sentiment clearly favoring the USD, and the JPY under pressure from both fundamental and technical perspectives, USD/JPY remains poised for potential additional upside. Traders will closely monitor US inflation data, BoJ commentary, and global risk appetite to guide their next moves.

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