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Japanese Yen slides to one-week low against USD amid reduced safe-haven demand
Monday, 28 July 2025 10:06 WIB | USD/JPY | Yen

The Japanese Yen (JPY) kicks off the new week on a softer note as the latest optimism over a trade deal between the US and the European Union (EU) undermines traditional safe-haven assets. Furthermore, reduced bets for an immediate interest rate hike by the Bank of Japan (BoJ), amid signs of cooling inflation in Japan and domestic political uncertainty, keep the JPY bulls on the defensive.

Meanwhile, Japan's trade deal with the US keeps the door open for an imminent BoJ rate hike this year, which, in turn, is seen acting as a tailwind for the JPY. This, along with subdued US Dollar (USD) price action, might keep a lid on any further gains for the USD/JPY pair. Traders might also refrain from placing aggressive directional bets and opt to wait for this week's key central bank events and data risks.

The US Federal Reserve (Fed) will announce its decision at the end of a two-day meeting on Wednesday, followed by the BoJ policy update on Thursday. Apart from this, US macro releases – the Advance Q2 GDP print, the Personal Consumption Expenditure (PCE) Price Index, and the Nonfarm Payrolls (NFP) report – will drive the US Dollar (USD) and provide a fresh impetus to the USD/JPY pair.

Source: FXstreet

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