Japanese Yen Strengthens as USD/JPY Slides to 147.00 Amid Weaker USD

Japanese Yen Retains Bullish Bias; USD/JPY Slides to 147.00 on Weaker USD

The Japanese Yen (JPY) gained fresh momentum following the release of Japan’s upbeat Gross Domestic Product (GDP) data for the second quarter. The economy expanded more than anticipated despite challenges posed by US tariffs, reinforcing confidence in Japan’s economic recovery.

BoJ’s Hawkish Stance Contrasts with Fed Policy

The Bank of Japan (BoJ) is expected to maintain its policy normalization path, showing a relatively hawkish outlook. This stance contrasts sharply with the Federal Reserve (Fed), which is anticipated to resume rate cuts starting in September. This divergence supports the Yen’s strength against the US dollar.

USD/JPY Slips as USD Weakens

Amid a broadly weaker US dollar, the USD/JPY currency pair slid to the 147.00 level during early European trading hours on Friday. The US dollar failed to build on Thursday’s strong recovery spurred by the Producer Price Index (PPI), as market participants favored the lower-yielding but more stable Yen.

Market Outlook

The divergent monetary policy expectations between the BoJ and the Fed are likely to continue influencing USD/JPY movements. The Yen’s bullish bias may persist as investors price in ongoing BoJ support and Fed easing.