Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Please try again

Live Webinar Events


Economic Calendar Events


Notify me about

Live Webinar Events
Economic Calendar Events






More View More
Yen Dips on Trade Balance Data, Eyes Possible US Tariffs Next

Yen Dips on Trade Balance Data, Eyes Possible US Tariffs Next

Megha Torpunuri, Contributor



  • Yen cautiously lower after July’s trade balance data, follow-through lacking
  • Bank of Japan unlikely to consider a near-term policy change
  • USD/JPY eyes US CPI and potential US-Japan trade war next

Just started tradingUSD/JPY? Check out our beginners’ FX markets guide !

The Japanese Yen slightly declined against the US Dollar as a flood of local economic data crossed the wires early into Monday’s Asia Pacific trading session. July’s balance of payment basis trade balance clocked in at -¥1.0b, up from economists’ forecasts of -¥47.7b but sharply lower from June’s ¥820.5b. This descent pared gains from the Yen’s rally during the latter half of last week, responding to news that President Trump may soon target Japan in the next series of developments of US tariffs.

USD/JPY 5-Minute Chart

USD/JPY Chart (5-minute)

However, the Yen’s slight downside momentum may continue as the currency pair has remained in a downtrend channel since July 20th. USD/JPY is close to testing a March 2018 uptrend line. Traders may look for confirmation of a breakout before next moves.

USD/JPY Daily Chart

USD/JPY Chart (Daily)

Regardless, the weakening in economic activity is unlikely to significantly affect the Bank of Japan’s monetary policy, as local inflation has consistently come in under the “sustainable two-percent” target set by the central bank. Furthermore, the monetary policy is currently pursuing in a large-scale quantitative and qualitative easing program with added yield curve control, which has done little to help the island nation’s slow growth.

Looking ahead, economic data and market risk trends will continue to indicate next moves for the currency pair. USD/JPY may be impacted by the release of July’s Japanese machine tool orders and August’s US CPI figures. Furthermore, heightened risk aversion could cause the anti-risk Japanese Yen to rise as traders await potential confirmation of a US-Japan trade war as the world’s third-largest economy continues to run trade surpluses with the United States.

USD/JPY Trading Resources

--- Written by Megha Torpunuri, DailyFX Research Team

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.