FX.co ★ Japanese Yen Falls on Disappointing Trade Data

On Thursday, the Japanese yen weakened to approximately 148 per dollar, reflecting investor reactions to lackluster trade data that heightened concerns about the possibility of a technical recession. Japan's trade surplus contracted to JPY 153.1 billion in June 2025, down from JPY 221.3 billion the previous year and significantly below the anticipated JPY 353.9 billion surplus. Exports decreased by 0.5% year-on-year to JPY 9,162.6 billion, marking a second consecutive monthly decline and falling short of the predicted 0.5% increase. This decline was largely due to ongoing pressures from the US tariff initiatives, sparking worries that Japan's economy could shrink again in the second quarter, potentially entering a technical recession. On the other hand, imports increased by 0.2% to JPY 9,009.5 billion, marking the first rise in three months, surpassing expectations of a 1.6% downturn. Meanwhile, investors are closely monitoring the possibility of fiscal stimulus measures in anticipation of the July 20 Upper House election, amid speculation regarding additional government expenditure and a potential cut in consumption tax aimed at stimulating economic growth.