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Japanese yen fell across the board, with the recent weakness being sparked by President Trump’s decision to impose a 25% tariffs on imports from Japan.

Yen suffered the biggest losses against US dollar and Australian dollar, after the Australia’s central bank surprised markets on decision to keep interest rates on hold.

USD JPY hit new two-week high, as strong rally extends into second consecutive day (up 1.6% since Monday’s opening).

Monday’s list and close above top of daily cloud generated bullish signal, which was boosted by today’s surge through next pivotal barriers at 145.91 (100DMA) and 146.15 (Fibo 61.8% of 148.64/142.11 downtrend.

Daily studies improved (14-d momentum bounced from the centreline and MA’s 10/20/55/100) turned to bullish setup, although overbought stochastic warning that bulls may face headwinds on approach to next targets at 147.00/10 (round-figure / Fibo 76.4%).

Some technical easing should be anticipated, but mainly as positioning for further advance, as long as fundamental conditions remain unchanged and negative for yen.

Broken 100DMA (145.91) should ideally hold, with extended dips to stay above cloud top (145.54) and keep bulls in play.

Firm break of 147.00/10 to open way towards 148.02 (June 23 spike high) and unmask key short-term barrier at 148.64 (May 12 peak).

Res: 147.10; 147.67; 148.02; 148.64.
Sup: 146.15; 145.91; 145.54; 145.20.

Market Picture

The crypto market capitalisation retains its weekly growth of approximately 1.8%, losing about 0.6% over the last 24 hours to $3.35 trillion. This is another round of buyer indecision at high levels, even though declines were actively bought up. At the same time, capitalisation continues to move away from its 200-day moving average, indicating continued bullish sentiment.

Bitcoin is hovering near $108.5K. Another attempt to develop growth last week resulted in increased sales, pushing the price back to the 50-day moving average. However, this line is an important medium-term support level, attracting buyers. On the other hand, last week’s activity confirmed that sales are picking up as the price approaches $110K, pushing the price down. Buyers are quickly letting off steam, making the market too nervous.

News Background

According to CoinShares, global investment inflows into crypto funds fell 2.5 times last week to $1.042 billion. Investments in Bitcoin increased by $790 million, Ethereum by $226 million, Solana by $22 million, XRP by $11 million, and Sui by $2 million.

Cryptocurrency ETFs saw inflows for the 12th consecutive week, bringing total assets under management to a new all-time high of $188 billion. The moderation of inflows into BTC suggests that investors are becoming more cautious as the asset approaches its historical highs, CoinShares notes.

According to The Block, Bitcoin’s on-chain activity and implied volatility have fallen to their lowest levels in nearly two years, despite the asset approaching historic highs.

Key indicators of activity in the cryptocurrency market point to the onset of a ‘summer lull,’ Glassnode notes. Trading volumes are at their lowest level in a year and continue to fall. A noticeable increase in the value of assets held by Bitcoin holders signals the risk of sell-offs in the event of a change in market sentiment.

The UAE authorities have denied reports that they are issuing ‘golden visas’ to cryptocurrency investors. Previously, the TON Foundation presented a programme for obtaining a 10-year UAE ‘golden visa.’ To participate, investors were offered to invest $100,000 in Toncoin (TON) and pay a fee of $35,000.

Markets

Japanese yields for a second day straight surged around 10 bps at the very long end of the curve. The 30-year bond yield is now up 20 bps since the start of the new week and just 13 bps shy of the record-high (3.2%) seen mid-May. Investors are turning nervous ahead of the July 20 elections in the Japanese Upper House of parliament. PM Ishiba is already running a minority government after snap elections last year and his approval rates are low (which by the way also helps explain Japan’s staunch stance in the US trade talks). Losing the Upper House elections could further strip the ruling coalition of its powers. To win voters over, markets fear another dose of stimulus at a time of already unsustainable public finances. The Japanese case serves as a reminder for the rest of the world, be it the UK, US or Europe and is already overshadowing the trade theme again. All three regions see the long end of the curve underperforming, the UK taking the lead. The fiscal situation in the country is getting a lot of market attention with the October budget being the next key event. Chancellor Reeves’ faces a potential £30bn hole that investors fear can only be found by changing (ie. loosen) the set of self-imposed fiscal rules. And as it happened, the UK’s fiscal watchdog (Office for Budget Responsibility) today flagged the “unsustainable” outlook in its annual fiscal risk report. It warned for a rapidly rising debt burden amid an aging population pushing up health care and pension spending and mounting climate and geopolitical risks. Adding to the problem of supply is waning demand from pension schemes. The 30-yr gilt yield adds 7 bps today with the 1998 high seen in May now just 20 basis points away. US rates add between 1.4 and 4.5 bps in a bear steepener. The 30-yr, currently 4.96%, is suddenly aiming for 5% again. And in Germany, raters add 5+ bps with the 30-yr tenor being 10 bps shy of a 14-yr high. The rest of the curve also shifts a couple of basis points higher too though. This could be the result of the EU and US potentially closing in on a trade agreement. Politico reported yesterday of a US proposal for a universal 10% (ie the floor) tariff with some exceptions here and there. Such a deal would be on the better side of expectations. It also lowers (or even removes) the already questionable need for a last ECB rate cut markets are currently pricing in, hence the near-parallel curve shift today. In any case, the general extension of the tariff deadline from July 9 to August 1 (USTS Bessent last week referred to an even later date on Labour Day, Sep 1) raises chances of finding common ground one way or another. The chair of the council of economic advisors, Miran, said there could be more trade deals by the end of the week.

The Japanese yen underperforms major global peers on currency markets. Japan was slapped by a 25% tariff as president Trump raises the pressure on a country that dug in for electoral motives. USD/JPY marches higher towards 146.65. EUR/JPY moves beyond a final resistance at 171.56 ahead of the July 2024 record high (175.43). The Aussie dollar is on the other side of the FX spectrum. AUD/USD rebounds to 0.654. The RBA unexpectedly stood pat on rates this morning (3.85%) over the risk that some CPI components may be above-forecast. Governor Bullock did say it is a matter about timing, not direction. An August cut is almost fully priced in. In between we find some muted moves in EUR/USD (unchanged around 1.1715). Rising risk premia weigh on sterling, pushing EUR/GBP higher north of 0.86.

News & Views

CPI consumer price inflation in Hungary in June rose 0.1% M/M and 4.6% Y/Y (was 0.2% and 4.4% in May). The outcome was close to expectations. The Hungarian central bank’s (MNB) core inflation estimate fell from 4.8% Y/Y to 4.4%. The bank indicated that both headline and core inflation were in line with its June inflation forecast. The increase was primarily due fuel prices as they decreased to a lesser extent than in the previous month. The MNB also indicated that price and margin restriction measures from the government had a significant inflation-reducing effect. The greatest effect was due to the price margin cap on food prices but the effect on household goods, which came into effect in May, also fully appeared. In addition, voluntary price restrictions by banks and telecoms are also holding down inflation. Annual inflation of tradables slowed to 2.5% from 2.9%. Annual inflation of market services was 0.4% M/M but still rose at 6.7% Y/Y. With inflation still holding well above the 3.0% +/- 1.0% target range of the MNB, today’s data justify the MNB indicating that policy will have to remain at the current restrictive level (6.5%) for some time to come. The forint trades little changed just below the EUR/HUF 400 level.

The NFIB's Small Business Optimism Index fell 0.2 points to 98.6 in June, coming in on-par with market expectations.

Four out of ten subcomponents deteriorated on the month, four improved, and two remained unchanged. The largest declines came from the share of businesses reporting current inventory levels as too low (down 6 points to -5%) and expectations for higher real sales over the second half of the year (down 3 points to 7%). A silver lining was the share of firms reporting higher real sales in the current quarter improved (up 4 points to -22%). Expectations for the economy to improve in the second half of the year declined (down 3 points to 22%).

The net share of businesses planning to increase employment rose 1 point to 13%. The share of firms with unfilled job openings rose 2 points to 36%. Quality of labor concerns were unchanged in June, with 16% of business owners identifying this as their top business problem.

The net share of firms currently increasing employee compensation rose 7 points to 33%, while the net share planning to do so over the next three months fell 1 point to 19%. The share of businesses 'raising' average selling prices rose 4 points to 29% while the share of those 'planning’ to raise average selling prices also rose 1 point to 32% - a 15-month high.

Key Implications

Small business confidence remained steady in June at relatively subdued levels as uncertainty remained elevated. The number one concern for small businesses continued to be taxes, as Congress worked to pass the One Big Beautiful Bill Act (OBB) and prevent the end of year tax hike resulting from the expiration of the 2017 Tax Cuts & Jobs Act. With the OBB now signed into law, concerns related to tariffs are likely to return as a top-of-mind concern for small businesses.

It is likely that tariffs have begun to apply upward pressure to selling prices, with the share of small businesses currently raising prices or planning to do so continuing to rise. For the broader economy, we have not yet seen the increase in the producer price index filter through to consumer prices, but as small businesses typically have thinner profit margins it may be the case that the higher costs cannot be forestalled in their transmission to consumers. With many of the reciprocal tariff rates announced in recent days appearing to be unchanged relative to April 2nd, trade uncertainty is likely to remain elevated through the new August 1st deadline.

Daily Pivots: (S1) 144.73; (P) 145.48; (R1) 146.83; More...

USD/JPY's rebound accelerates higher today but after all, it's still bounded in range of 142.66/148.01.On the upside, firm break of 148.01 resistance will resume the rise from 139.87 to 61.8% retracement of 158.86 to 139.87 at 151.22. However, break of 142.66 will bring deeper fall back to retest 139.87 low.

In the bigger picture, price actions from 161.94 (2024 high) are seen as a corrective pattern to rise from 102.58 (2021 low). There is no clear sign that the pattern has completed yet. But still, strong support is expected from 38.2% retracement of 102.58 to 161.94 at 139.26 to bring rebound.

Daily Pivots: (S1) 0.7948; (P) 0.7970; (R1) 0.8003; More….

USD/CHF's consolidation from 0.7871 is extending and intraday bias stays neutral. Stronger recovery cannot be ruled out, but upside should be limited by 0.8054 support turned resistance to bring another fall. Below 0.7871 will extend the larger down trend to 61.8% projection of 0.9200 to 0.8038 from 0.8475 at 0.7757. Firm break there will pave the way to 100% projection at 0.7313 next.

In the bigger picture, long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382. In any case, outlook will stay bearish as long as 0.8475 resistance holds.

Daily Pivots: (S1) 1.3563; (P) 1.3614; (R1) 1.3652; More...

GBP/USD's correction from 1.3787 continues today and deeper fall might be seen. But downside should be contained by 1.3369 support to bring rebound. On the upside, above 1.3680 minor resistance will bring retest of 1.3787. Firm break of 1.3787 will resume larger up trend to 100% projection of 1.2099 to 1.3206 from 1.3138 at 1.3813.

In the bigger picture, up trend from 1.3051 (2022 low) is in progress. Next medium term target is 61.8% projection of 1.0351 to 1.3433 from 1.2099 at 1.4004. Outlook will now stay bullish as long as 55 W EMA (now at 1.2985) holds, even in case of deep pullback.

Daily Pivots: (S1) 1.1667; (P) 1.1729; (R1) 1.1770; More...

EUR/USD's correction from 1.1829 continues today and intraday bias stays neutral. Downside should be contained by 1.1630 resistance turned support to bring rebound. Firm break of 1.1829 will resume the rise from 1.0176 and target 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 1.1604 support holds.

Global equity markets traded cautiously and remained stable on Tuesday, showing limited reaction to escalating US trade threats. Major European indexes moved in narrow ranges following modest gains in Asia, while US equity futures stayed flat. The restrained response suggests markets are neither complacent nor panicked as they assess the credibility and timing of new tariff risks.

Investor nerves were tested when US President Donald Trump confirmed that imports from 14 countries—including Japan, South Korea, Malaysia, and Indonesia—will face new tariffs ranging from 25% to 40%, starting August 1. However, the absence of immediate action and Trump’s ambiguous tone helped calm markets. “The deadline is firm, but not 100% firm,” he told reporters, suggested that the US remains open to renegotiation.

It's also noted that pushing the implementation date to August—beyond the previously expected July 9 deadline—helped ease fears of an imminent cliff edge. This delay gives key US trade partners more time to negotiate or soften the impact, explaining why risk sentiment has remained broadly resilient so far.

In the currency markets today, Australian Dollar outperformed sharply, gaining across the board after RBA defied expectations and held the cash rate steady at 3.85%. Speaking after the decision, RBA Governor Michele Bullock stressed that the hold was a matter of timing rather than a change in direction. She said the board preferred to wait for the full Q2 CPI report before confirming that inflation is heading sustainably toward target. Bullock emphasized that monetary policy remains well-positioned to respond if global conditions deteriorate further.

Overall, Kiwi followed Aussie as the second-best performer, with Loonie also firming. Yen lagged alongside Sterling and Dollar, while Swiss Franc and Euro were mixed.

Focus now turns to RBNZ, which is expected to keep its official cash rate unchanged at 3.25%. Recent inflation data has been mixed, and policymakers are looking for clearer signals before moving again. Holding now gives the RBNZ space to reassess in August with updated projections.

Technically, Aussie is currently outperforming Kiwi for the moment. AUD/NZD's rise from 1.0724 accelerated higher today and remains on track to retest 1.0920. Firm break there will resume whole rally from 1.0649 and target 100% projection of 1.0649 to 1.0920 from 1.0724 at 1.0995. Nevertheless, break of 1.0843 minor support will mix up the outlook and turn bias neutral first.

In Europe, at the time of writing, FTSE is up 0.07%. DAX is up 0.07%. CAC is down -0.33%. UK 10-year yield is up 0.051 at 4.643. Germany 10-year yield is up 0.05 at 2.695. Earlier in Asia, Nikkei rose 0.26%. Hong Kong HSI rose 1.09%. China Shanghai SSE rose 0.70%. Singapore Strait Times rose 0.40%. Japan 10-year JGB yield rose 0.052 to 1.490.

RBA skips July cut, prefers to wait a little more for clarity

RBA held its cash rate target at 3.85%, opting not to deliver the widely expected 25bps cut. The decision, passed by a 6-3 majority, reflected cautious optimism as the central bank noted more balanced inflation risks and a still-resilient labor market. However, the Board stopped short of declaring victory on inflation and flagged considerable uncertainty in the domestic and global outlook.

In its statement, RBA said it could afford to “wait for a little more information” to ensure inflation is sustainably heading toward its 2.5% target. The Board remains concerned about both demand and supply-side uncertainty, particularly in light of volatile global trade policy. RBA stressed that monetary policy remains "well-positioned" to respond quickly if conditions deteriorate.

RBA also issued a measured warning on the risks stemming from U.S. tariffs and global trade policy shifts, noting that while extreme outcomes may be avoided, the uncertainty itself could weigh on demand. Financial markets have rebounded on hopes of compromise, but the RBA highlighted the risk that firms and households could delay spending amid the policy fog.

Australia's NAB business confidence rises to 5, conditions rebound to 9

Australia’s business sentiment improved sharply in June, with NAB Business Confidence rising from 2 to 5, its highest trend level in over a year. Business Conditions surged from 0 to 9 after weakening for five straight months. The rebound was broad-based, with trading conditions jumping from 5 to 15, profitability returning to positive territory from -5 at 4, and employment conditions edging up from to 3.

On the pricing side, signals were mixed. Labour cost growth eased slightly from 1.6% to 1.5% (quarterly equivalent), while purchase costs rose from 1.2% to 1.5%. Final product price growth ticked up from 0.5% to 0.6%, although retail price growth slowed to 0.6%, hinting at easing consumer price pressures despite supply-side stickiness.

NAB’s Gareth Spence said the data suggest momentum may be picking up into the second half of 2025. “While we know the monthly survey can be volatile, the hope is at least some of these trends will be sustained,” he noted, calling the jump in both confidence and conditions a positive surprise amid ongoing global uncertainty.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1667; (P) 1.1729; (R1) 1.1770; More...

EUR/USD's correction from 1.1829 continues today and intraday bias stays neutral. Downside should be contained by 1.1630 resistance turned support to bring rebound. Firm break of 1.1829 will resume the rise from 1.0176 and target 61.8% projection of 1.0176 to 1.1572 from 1.1064 at 1.1927.

In the bigger picture, rise from 0.9534 long term bottom could be correcting the multi-decade downtrend or the start of a long term up trend. In either case, further rise should be seen to 100% projection of 0.9534 to 1.1274 from 1.0176 at 1.1916. This will now remain the favored case as long as 1.1604 support holds.

Asian stock markets remained steady despite the latest update on US President Donald Trump's tariff plans. On Tuesday, the dollar stayed strong, and oil prices dropped.

In the US, stock prices fell after Trump sent letters to 14 countries, including Japan and South Korea, announcing much higher tariffs on imports. However, the start of these tariffs has been delayed until August 1.

Asian Market Wrap

Most Asian stock markets went up as President Trump signaled he’s open to more trade talks, easing concerns after imposing heavy tariffs on several countries.

South Korea’s stock market jumped over 1.4%, and Japan’s Nikkei-225 index rose 0.2%. The MSCI regional stock index edged up 0.1% after small ups and downs earlier in the day. The South Korean Won got stronger, while the Dollar index dropped 0.2%. The Euro gained value after reports that the U.S. offered the EU a deal with a 10% tariff limit.

In Japan, 30-year government bond yields kept climbing. Meanwhile, Australia’s currency surged after the central bank surprised everyone by keeping interest rates unchanged.

European Open

Global stock markets were mostly steady or slightly higher on Tuesday as investors reacted calmly to the latest update on U.S. President Donald Trump's tariff plans.

On Monday, Trump sent letters to 14 countries, including major Asian trade partners like Japan and South Korea, announcing much higher tariffs on imports to the US.

However, the market response has been more cautious this time, unlike the sharp drops seen three months ago on "Liberation Day." This is because many expect countries to work on trade deals with the US before the new August 1 deadline.

In Europe, the STOXX 600 index stayed mostly unchanged, while the euro rose 0.4%. Reports suggest the EU won’t receive a letter about higher tariffs and could finalize a trade deal by Wednesday.

The EU aims to secure a temporary trade deal with the U.S. this week, which would lock in a 10% tariff rate past the August 1 deadline while working on a long-term agreement. Meanwhile, Bulgaria is set to take the final step to join the Eurozone as its 21st member next year, with EU finance ministers meeting on Tuesday to approve its application.

On the FX front, the euro hit a one-year high against the yen and was last up 0.4% on the day at 171.745.

The euro rallied against the dollar as well, rising 0.4% to 1.1735, partially recouping Monday's 0.67% loss.

The Australian dollar was the star performer on Tuesday, jumping over 1% after the Reserve Bank of Australia surprised markets by keeping interest rates unchanged. It was last up 0.8% at 0.6545.

The New Zealand dollar rose 0.38% to 0.60245, while the British pound increased 0.3% to 1.3642.

China's yuan briefly dropped to a two-week low against the dollar due to renewed worries about US tariffs. However, it bounced back after major state-owned banks stepped in to support the currency.

Currency Power Balance

Source: OANDA Labs

Looking at commodities and Oil prices have recovered following a gap down over the weekend. Markets appear to be hopeful that trade deals may spur on a bigger rally despite OPEC + further unwinding production cuts.

Gold has also rallied following a brief foray below the 3300/oz handle. This morning Gold is a bit more tentative trading around 3320/oz which is some way off the Asian session highs around 3346/oz.

Economic Data Releases and Final Thoughts

Looking at the economic calendar, it remains a quiet one. There are no high impact data releases from the EU, UK or US ahead today.

Thus I am expecting tariff and trade deal chatter to dominate matters today and for the majority of the week ahead.

We will have some comments from ECB policymaker Nagel later today while we will also get a glimpse at the NY Fed inflation expectation number.

Inflation expectations may paint a picture for market participants especially after US Treasury Secretary Scott Bessent said the US will experience growth without inflation, something which until now has been a sticking point.

For all market-moving economic releases and events, see the MarketPulse Economic Calendar. (click to enlarge)

Chart of the Day - DAX Index

From a technical standpoint, the DAX has been moving higher this morning on optimism that the EU will strike a deal with the Trump administration.

The EU is looking to secure a temporary deal which would cap tariffs at 10% past the August 1 deadline while working on a long-term agreement.

This appears to have given EU stocks a boost this morning and this comes despite a drop off in both German imports and exports.

The DAX has broken above the 24000 handle with the next key resistance at 24330. A break above this level may lead to further gains especially if the proposed 10% tariff is agreed between the EU and US.

DAX Daily Chart, July 8. 2025

Source: TradingView.com (click to enlarge)

Support

• 24000
• 23727
• 23471

Resistance

• 24330
• 24500
• 24750