Yen exchange rate today
According to Lao Dong, on July 3, the Japanese Yen (JPY) suddenly traded weakly against the USD, when the USD/JPY pair returned to nearly 144.00.
The main reason is that market sentiment has improved after the US and Vietnam reached a trade agreement, reducing concerns about prolonged trade tensions, thereby reducing the need to hold the Japanese Yen as a safe haven channel.
In addition, US President Donald Trump has just threatened to impose higher tariffs on imported goods from Japan, specifically increasing the tax to 30-35% compared to the current 24%, if Japan does not buy US rice. This information has put the Yen under further selling pressure.
Japanese Yen weakens but decline may be limited
According to FXStreet, the decline of the Japanese Yen may be limited thanks to expectations that the Bank of Japan (BoJ) will continue its interest rate hike path as inflation in Japan has exceeded the 2% target for more than three consecutive years.
BoJ Governor Kazuo Ueda said that current interest rates are still below neutral and further decision to raise interest rates will be based on inflationary developments, strengthening the possibility of the BoJ tightening policy further, supporting the Yen in the medium term.
In contrast, in the US, although Fed Chairman Jerome Powell said the rate cut depends on data, the market is still expecting a nearly 25% chance of the Fed cutting interest rates at its meeting in late July, and the possibility of a rate cut in September is almost certain.
In addition, the US private sector employment data was disappointing when it unexpectedly cut 33,000 jobs in June, increasing the forecast of an unemployment rate of 4.3% in the June employment report released later today.
In the short term, the USD will remain slightly positive, but if tonight's employment data is unfavorable, the USD's increase could stagnate, helping the Yen maintain its current price range.
