Yen Falls Amid Risk-on Mood

(RTTNews) - The Japanese yen weakened against other major currencies in the European session on Wednesday amid increased risk-on mood, as investors pondered the prospect of Federal Reserve rate cuts and hoped for a positive resolution on trade discussions ahead of completion of 90-day tariff pause on July 9.

EU's trade chief is expected to hold negotiations this week in Washington to avert higher U.S. tariffs.

U.S. President Donald Trump's thinking of additional 30% or 35% tariffs on Japan led to the value of JPY to decline.

The Bank of Japan's (BoJ) reluctance to raise interest rates is another factor hurting the value of JPY.

The Bank of Japan Governor Kazuo Ueda further emphasized that data, including expectations and wage growth, will be utilized for influencing any future rate increases. According to Ueda, underlying inflation is still below target even though headline inflation has been above 2% for almost three years.

Investors are also awaiting ECB President Christine Lagarde's speech at the central bank's forum in Portugal later today.

In the European trading today, the yen fell to a record low of 181.94 against the Swiss franc and a 2-day low of 144.25 against the U.S. dollar, from early highs of 181.29 and 143.33, respectively. If the yen extends its downtrend, it is likely to find support around 182.00 against the franc and 146.00 against the greenback.

Against the euro and the pound, the yen slid to 169.79 and 197.55 from early highs of 169.21 and 197.02, respectively. The yen may test support around 170.00 against the euro and 199.00 against the pound.

Against Australia, the New Zealand and the Canadian dollars, the yen edged down to 94.69, 87.69 and 105.67 from early highs of 94.32, 87.37 and 105.09, respectively. The next possible downside targets for the yen is seen around 95.00 against the aussie, 88.00 against the kiwi and 107.00 against the loonie.

Looking ahead, U.S. MBA mortgage approvals data, U.S. ADP employment data for June, Canada S&P Global Manufacturing PMI data for June and U.S. EIA crude oil data are slated for release in the New York session.