Forex News: Yen Retreats Amid US-Japan Trade Uncertainty

Yen Retreats Amid US-Japan Trade Uncertainty

(RTTNews) - The Japanese yen retreated from early highs against other major currencies in the European session on Friday, amid concerns on US-Japan relations in light of Trump's placement of a 25 percent tariff on Japanese exports this week, which will go into force on August 1.

Japanese Prime Minister Shigeru Ishiba has warned that Japan must lessen its reliance on the US in the areas of energy, food security, and defense as a result of the move, which has heightened tensions between the two countries.

Since the central bank has been obliged to halt its policy tightening due to uncertainties, trade events have been a significant factor for the Bank of Japan (BoJ). When the BoJ makes its next decision on July 31, the markets are pricing in a hold.

In the European trading today, the yen fell to 2-day lows of 199.45 against the pound and 184.47 against the Swiss franc, from an early 4-day high of 198.24 and a 3-day high of 183.38, respectively. If the yen extends its downtrend, it is likely to find support around 200.00 against the pound and 186.00 against the franc.

The yen slipped to 171.77 against the euro, from an early 4-day high of 170.81. On the downside, 173.00 is seen as the next support level for the yen.

Against the U.S. and the Canadian dollars, the yen dropped to 2-day lows of 147.18 and 107.44 from early highs of 146.25 and 106.58, respectively. The next possible downside target for the yen is seen around 148.00 against the greenback and 108.00 against the loonie.

Looking ahead, U.K. NIESR monthly GDP tracker for June, Canada jobs data for June, building permits for May, U.S. Baker Hughes oil rig count data, U.S. WASDE report and U.S. monthly budget statement for June are slated for release in the New York session.

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