Yen Slides Amid Risk-on Mood

(RTTNews) - The Japanese yen weakened against other major currencies in the European session on Tuesday, as European stocks traded higher despite lingering concerns about U.S. President Donald Trump's tariff plans and aggressive negotiation tactics.

Market participants still believe that Trump may soften his stance before the measures take effect on August 1.

Investors also await cues from the U.S. earnings season. Major U.S. banks including JPMorgan, Wells Fargo and Citigroup will report their quarterly results today to mark the unofficial start of the second quarter earnings season, followed by Goldman Sachs, Morgan Stanley and Bank of America later in the week.

On the economic front, U.S. inflation readings due this week may show how pricing for goods and services are responding to the tariff impact.

The key CPI report due later in the day is expected to show an uptick in inflation as companies begin passing on higher import costs.

Fed Chair Jerome Powell may come under increasing pressure to cut rates if the impact is minimal and inflation trends lower. In the European trading today, the yen declined to a record low of 185.72 against the Swiss franc and a 1-year low of 172.74 against the euro, from early highs of 180.83 and 172.26, respectively. The yen is likely to find support around 187.00 against the franc and 173.00 against the euro.

Against the pound, the U.S. dollar and the NZ dollar, the yen edged down to 198.76, 147.82 and 88.62 from early highs of 198.21, 147.55 and 88.20, respectively. On the downside, 200.00 against the pound, 148.00 against the greenback and 89.00 against the kiwi are seen as the next support levels for the yen.

Against the Australia and the Canadian dollars, the yen slid to more than 5-month lows of 97.08 and 107.96 from early highs of 96.55 and 107.772, respectively. If the yen extends its downtrend, it is likely to find support around 98.00 against the aussie and 109.00 against the loonie.

Looking ahead, Canada housing starts and building permits for June, Canada manufacturing sales data for May, U.S. and Canada CPI data for June and U.S. NY Empire State manufacturing index for July are slated for released in the New York session.