Fundamental Market Analysis for July 8, 2025 USDJPY

The yen remains under pressure from trade frictions. President Donald Trump has confirmed 25 percent tariffs on Japanese goods effective 1 August, fuelling U.S.-inflation expectations and reducing the odds of a near-term Fed rate cut. Ten-year Treasury yields have climbed above 4.45 percent, while the spread over equivalent JGBs hovers near 380 basis points—supportive for the dollar.

Japan’s domestic backdrop offers little relief. Nominal wage growth has slowed for a third straight month, and real household incomes have posted their deepest decline in twenty months. The weak earnings momentum complicates the Bank of Japan’s exit strategy and keeps ultra-loose policy firmly in place, encouraging further capital outflows from the yen.

Against this backdrop, USD/JPY is consolidating above its 100-day moving average around 146.40–146.50. Absent a sudden flight to safe-haven assets, the pair could break 147.00 in the coming sessions, while the 145.950–146.000 zone is widely viewed as an attractive area to add to long positions.

Trading recommendation: BUY 146.250, SL 145.950, TP 147.000