The Japanese yen declined in the Asian market on Monday at the start of the week’s trading, slipping once again into negative territory against the U.S. dollar and nearing its lowest level in several weeks, as safe-haven demand for the currency slowed.

Meanwhile, the U.S. dollar strengthened as the end of the 90-day tariff deadline announced by President Donald Trump approaches this Wednesday. So far, only the UK, China, and Vietnam have agreed to any form of trade deals with the White House.

Expectations of a rate hike by the Bank of Japan in July have increased following strong economic data released Friday in Tokyo. Investors now await further figures on inflation, wages, and unemployment in the world’s third-largest economy.

The Price

The dollar rose against the yen by 0.35% to ¥144.84, up from the day’s opening at ¥144.37, after hitting a low of ¥144.22.

The yen had gained 0.3% against the dollar at Friday’s close — its first advance in three sessions — following strong spending data out of Japan.

On a weekly basis, the yen posted a 0.1% gain, marking its second straight weekly rise against the dollar.

U.S. Dollar

The U.S. dollar index rose 0.15% on Monday, resuming gains after a brief pause on Friday and nearing its highest level in several weeks. The move reflected broad dollar strength against a basket of major and minor currencies.

The greenback’s rise came amid growing anticipation among traders for major headlines related to trade, as the deadline set by President Trump to enforce reciprocal tariffs nears.

Most of America’s trade partners are expected to face significantly higher tariffs after the 90-day deadline expires on “Liberation Day” this Wednesday. To date, only the UK, China, and Vietnam have signed any form of trade deal with the administration.

Commentary & Analysis

James Kniveton, Senior FX Dealer at Convera, said:“Volatility seems inevitable once the pause officially ends and new tariff levels are announced.”

He added, “However, the impact this time may be less severe. Unlike previous announcements where tariffs exceeded expectations, the current proposals are largely priced in. Additionally, markets seem to be factoring in the possibility of another deadline extension.”

Japanese Interest Rates

Data released Friday in Tokyo showed household spending in Japan rose 4.7% year-over-year in May — the fastest pace since August 2022 — well above market expectations of a 1.3% rise. April spending had seen a 0.1% decline.

Following this data, the odds of the Bank of Japan raising interest rates by 25 basis points at its July meeting increased from 40% to 45%.

Investors are now awaiting further data on inflation, wages, and unemployment to reassess these expectations.

Bitcoin prices declined on Friday after surrendering recent gains, as traders braced for the upcoming implementation of U.S. President Donald Trump’s trade tariffs and markets scaled back expectations of near-term interest rate cuts — adding pressure on digital assets.

Broader cryptocurrencies also pulled back, despite U.S. lawmakers announcing the long-awaited “Crypto Week,” which will see the discussion of major regulatory bills for the sector.

Bitcoin, the world’s largest cryptocurrency, dropped 0.9% to $108,933.4 by 09:22 GMT, after climbing as high as $110,500 overnight.

Those initial gains were driven by optimism surrounding progress in U.S.–China trade talks, which helped the coin break out of a narrow trading range between $103,000 and $108,000 that had persisted for nearly a month.

Despite the retreat, Bitcoin remained on track for a second consecutive weekly gain.

However, the positive momentum faded under renewed concerns over steep U.S. tariffs and a diminished likelihood of an imminent rate cut. Adding to the pressure was Congress' approval of Trump’s sweeping tax and spending package, which is estimated to significantly expand the national debt in the coming years.

Trading volumes were expected to remain subdued Friday amid the U.S. Independence Day holiday.

Bitcoin retreats amid tariff and rate cut concerns

Bitcoin pulled back from Thursday’s highs after Trump announced plans to begin sending letters to major economies outlining the new tariff regime, starting Friday.

According to Trump, between 10 and 12 countries would receive the letters, detailing tariffs ranging from 10% to 20%, and potentially as high as 60%–70%, set to take effect on August 1.

His remarks sparked renewed concerns over the economic fallout of such measures, which could cause major disruptions to global trade.

Analysts noted that the lack of clarity surrounding U.S. trade policy has also been a key reason why the Federal Reserve has held interest rates steady. Fed Chair Jerome Powell recently warned of the inflationary risks such tariffs could trigger.

Meanwhile, Thursday’s stronger-than-expected U.S. jobs report reduced market bets on a July rate cut, and expectations for September easing were also scaled back.

It’s worth noting that digital assets typically react negatively to higher interest rates, as they reduce the liquidity available for riskier investments.

Crypto market softens despite legislative buzz in Washington

The broader crypto market saw modest declines Friday, despite the announcement of Crypto Week in the U.S. Congress — which, so far, has failed to spark an immediate rebound in prices.

Members of the House of Representatives declared that the week of July 14 will be dedicated to digital asset legislation, with three major bills expected to advance:

The GENIUS Act: A comprehensive framework for regulating stablecoins

The CLARITY Act

The Anti-CBDC Surveillance State Act

Speaker of the House Mike Johnson said in a Thursday statement: “House Republicans are taking decisive action to implement President Trump’s full digital asset and cryptocurrency agenda.”

Was Bitcoin’s move to $110,000 a breakout or a bull trap?

With Bitcoin hovering below the $110,000 threshold, traders remained divided over the coin’s next move.

Prominent trader Byzantine General posted a chart suggesting the coin may be gearing up for a breakout above $112,000, citing futures data. He noted that rising open interest alongside price movement often precedes sharp price expansions.

However, market order books began to reflect increasing sell pressure. A large block of sell orders appeared around the $110,000 level — often interpreted as profit-taking or resistance from major holders.

On the other hand, trader KillaXBT noted that Bitcoin had recently swept liquidity above resistance and below support, only to reverse quickly — a behavior typical of “fakeouts” aimed at liquidating leveraged traders before a genuine directional move.

Oil futures edged slightly lower on Friday after Iran reaffirmed its commitment to the Nuclear Non-Proliferation Treaty, as OPEC+ prepares to approve a production increase over the weekend.

Brent crude fell 49 cents, or 0.71%, to $68.31 a barrel by 08:31 GMT, while U.S. West Texas Intermediate dropped 41 cents, or 0.61%, to $66.59.

Trading volumes remained thin due to the U.S. Independence Day holiday.

U.S. news outlet Axios reported Thursday that Washington is planning to resume nuclear talks with Iran next week. Iranian Foreign Minister Abbas Araqchi confirmed that Tehran remains committed to the Non-Proliferation Treaty.

At the same time, the U.S. imposed new sanctions Thursday targeting Iran’s oil trade.

Saudi Defense Minister Prince Khalid bin Salman reportedly met with President Donald Trump and other U.S. officials at the White House to discuss de-escalation efforts with Iran.

Trump said Thursday he would be willing to meet with Iranian representatives “if necessary.”

Vandana Hari, founder of energy analytics firm Vanda Insights, said: “Thursday’s reports about the U.S. willingness to resume nuclear negotiations with Iran, along with Araqchi’s clarification that cooperation with the IAEA has not been entirely suspended, helped ease fears of renewed confrontations.”

Araqchi’s comments followed Tehran’s passage of a law suspending cooperation with the International Atomic Energy Agency.

Meanwhile, OPEC+, the world’s largest oil-producing alliance, is set to announce a production increase of 411,000 barrels per day for August, as part of its ongoing efforts to reclaim market share, according to four delegates who spoke to Reuters.

In parallel, U.S. trade policy uncertainty resurfaced ahead of the July 9 expiration of the temporary freeze on tariff hikes.

Washington announced it would begin sending letters on Friday to various countries, outlining new tariff rates on exports to the U.S. — a shift from its previous approach favoring bilateral trade agreements.

President Trump told reporters before departing for Iowa on Thursday that the letters would be sent to ten countries at a time, with tariff rates ranging between 20% and 30%.

The 90-day freeze on higher U.S. tariffs is set to end on July 9, while major economies like the European Union and Japan have yet to finalize trade deals with Washington.

In a separate development, Barclays said it raised its Brent crude price forecast by $6 to $72 a barrel for 2025, and by $10 to $70 in 2026, citing an improved outlook for global oil demand.

The US dollar edged lower against major currencies on Friday after President Donald Trump succeeded in pushing through his sweeping tax legislation, amid mounting pressure on countries to quickly strike trade agreements with Washington.

The greenback had posted gains on Thursday following stronger-than-expected jobs data, which delayed expectations for Federal Reserve rate cuts. However, the dollar index, which tracks the currency’s performance against a basket of major peers, remains on track to record its second consecutive weekly decline.

The Republican-controlled House narrowly passed Trump’s signature bill, dubbed the “One Big Beautiful Law,” which combines sweeping tax cuts and expansive spending. The bill carries an estimated cost of \$3.4 trillion, pushing the U.S. national debt to \$36.2 trillion. Trump is expected to sign the bill into law on Friday.

With U.S. markets closed in observance of Independence Day, attention now turns to the looming July 9 deadline, when Trump’s wide-ranging tariffs are set to kick in for countries that haven’t secured trade agreements — including Japan.

Ipek Ozkardeskaya, senior market analyst at Swissquote Bank, commented: “Demand for the dollar is easing amid growing concerns over ballooning U.S. debt, and whether there’s enough appetite to absorb it. There’s also worry that the tariff framework and trade disruptions will weigh on growth, while the Fed’s ability to support the economy remains limited by persistent inflation risks.”

The dollar’s performance in the first half of the year has been its weakest since 1973, as Trump’s chaotic tariff strategy rattled markets and raised questions about U.S. economic stability and the safety of Treasury bonds. Earlier this week, the greenback fell to its lowest levels in over three years against both the euro and the British pound.

The dollar index dipped 0.1% to 96.96, trimming Thursday’s 0.4% advance. The euro rose 0.1% to \$1.1773, heading for a 0.4% weekly gain.

The Japanese yen climbed 0.4% to 144.375 per dollar, while the Swiss franc extended gains, rising 0.2% to 0.7939 per dollar.

Trump said several countries would receive letters on Friday detailing the tariff rates they will face — a shift from his earlier preference for individual bilateral deals.

European Commission President Ursula von der Leyen stated that the EU aims to reach a preliminary agreement with the U.S. before the deadline. Japan, which has been in Trump’s crosshairs recently, plans to dispatch its chief trade negotiator to Washington as early as this weekend.

Adding to global trade tensions, China announced it will impose tariffs of up to 34.9% on European brandy for five years starting July 5.

Investors worried about the state of the U.S. economy found some relief on Thursday, after Labor Department data showed nonfarm payrolls rose by 147,000 in June — beating forecasts of just 110,000.

Hirofumi Suzuki, chief currency strategist at SMBC, noted: “The U.S. labor market is slowing gradually, but the fact that there wasn’t an abrupt deterioration is reassuring.”

“Personally, I expect trade talks to yield little progress, which should keep the dollar weak and support the yen.”

According to CME Group’s FedWatch tool, the probability of the Fed holding interest rates steady at its July meeting rose to 95.3%, up from 76.2% on July 2.

Economists continue to expect that the Fed is unlikely to begin cutting rates before September — or possibly even later in the year.