The Japanese Yen (JPY) edges lower against its American counterpart at the start of a new week following the release of weaker domestic data. Real wages in Japan fell for the fifth straight month in May, at the fastest pace in nearly two years amid persistent inflationary pressures. This comes on top of the looming US tariffs on Japanese exports, which could squeeze corporate profits and potentially undermine future wage growth. The outlook could complicate the BoJ’s monetary policy normalization schedule and act as a headwind for the JPY.
Meanwhile, Israeli strikes on three Yemeni ports early this Monday keep geopolitical risks in play and should benefit the JPY's relative safe-haven status. Moreover, the growing acceptance that the BoJ will hike interest rates again might hold back the JPY bears from placing aggressive bets. In contrast, the US Dollar (USD) bulls remain on the sidelines amid bets that the Federal Reserve (Fed) would resume its rate-cutting cycle in the near future. This, in turn, should contribute to capping the upside for the USD/JPY pair amid the absence of relevant macro data.
Momentum beyond the 144.65-144.70 confluence – comprising the 100-period Simple Moving Average (SMA) on the 4-hour chart and the 38.2% Fibonacci retracement level of the June-July downfall – would be seen as a key trigger for the USD/JPY bulls. The subsequent move up could allow spot prices to reclaim the 145.00 psychological mark and test the 145.25-145.30 supply zone. A sustained strength beyond the latter should pave the way towards the 61.8% Fibo. retracement level, around the 146.00 round figure.
On the flip side, the Asian session low, around the 144.20 horizontal zone, could offer some support ahead of the 144.00 round figure, or the 23.6% Fibo. retracement level. A convincing break below might shift the bias back in favor of bearish traders and drag the USD/JPY pair to the 143.45 intermediate support en route to the 143.00 mark. The downward trajectory could extend further towards the 142.70-142.65 region, or a one-month low touched last Tuesday.
This indicator, released by the Ministry of Health, Labor and Welfare, shows the average income, before taxes, per regular employee. It includes overtime pay and bonuses but it doesn't take into account earnings from holding financial assets nor capital gains. Higher income puts upward pressures on consumption, and is inflationary for the Japanese economy. Generally, a higher-than-expected reading is bullish for the Japanese Yen (JPY), while a below-the-market consensus result is bearish.
Read more.Last release: Sun Jul 06, 2025 23:30
Frequency: Monthly
Actual: 1%
Consensus: 2.4%
Previous: 2.3%
Source: Ministry of Economy, Trade and Industry of Japan