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1. BoJ Keeps Policy Steady Amid Inflation Concerns
The Bank of Japan (BoJ) maintained its ultra-loose monetary policy on June 19, 2025, keeping the short-term interest rate at -0.1% and continuing its yield curve control (YCC) program to cap 10-year bond yields around 0% (boj.or.jp). Despite rising global inflation pressures, Japan’s inflation remains moderate at about 2.1%, allowing the BoJ to stay dovish.
2. JPY Volatility Amid Global Market Uncertainty
The Japanese yen experienced modest appreciation against the U.S. dollar, trading near JPY 135/USD, supported by safe-haven demand due to ongoing geopolitical tensions in the Middle East and risk-off sentiment in global markets (marketwatch.com).
3. Economic Data Impact
May’s industrial production data showed a 0.4% month-on-month increase, signaling steady recovery momentum in Japan’s manufacturing sector (stat.go.jp). However, weaker export figures and global supply chain uncertainties continue to weigh on growth expectations.
4. Technical Outlook for USD/JPY
Technically, the USD/JPY pair is testing support levels near 134.80 with resistance around 136.20. Short-term indicators suggest potential consolidation before the next directional move, influenced by global risk sentiment and BoJ policy signals (dailyfx.com).
๐ What to Watch Next for JPY?
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BoJ’s Policy Statements: Future guidance on YCC and inflation targets.
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US Economic Data: As the USD/JPY pair is highly sensitive to US Federal Reserve moves.
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Global Geopolitical Developments: Ongoing Middle East tensions and their impact on safe-haven flows.
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