USDJPY fell for the first time in three trading days, after being pressured by selling ahead of narrowing interest-rate gaps between Japan and the US.

【7/9Market Overview

Tokyo time, USD/JPY started with a view that Japan and the United States are cautious toward changes in monetary policy due to the uncertainty surrounding U.S. tariff policy, leading to yen selling and dollar buying. It rose above the previous day high of146.97yen to147.18yen, after which profit-taking selling appeared, but the decline was limited to the upper- to mid-146 yen area. In European time, USD/JPY saw sellers ahead of European players' position adjustments.NYtime, as U.S. long-term interest rates fell, a selling focus emerged on the idea of narrowing U.S.-Japan real interest rate differentials, and it temporarily fell to146.25yen and3 to a decline for the first time in three business days.

Note that6/17-18minutes of theFOMCminutes indicated that “increasing tariffs could be a major source of upward price pressures.” On the other hand, it was also noted that “the majority of participants judged that it would be appropriate to lower the target range for the policy interest rate somewhat this year,” and “a few participants pointed out that if data tracks as expected, the next meeting could consider a faster reduction in the target range for the policy interest rate.” This suggests a widening divergence in views on the pace of future rate cuts.

【7/10Market View