CAD/JPY Breaks 108 as Yen Falters, BOC’s Rate Hold in Focus

CAD/JPY gained above the 108 level on board-based yen weakness. It hits an intraday high of 108.23 and is currently trading around 108.03.

Citing a "clear consensus" among continuing U. S. trade tensions and bigger tariffs that obscure the outlook, the Bank of Canada left its policy rate at 2. 75% (bank rate 3%, deposit rate 2. 70%) on July 30, 2025—its third consecutive hold. Though the economy has displayed stability, activity has decreased, and unemployment has reached 6. 9% in June. Headline inflation hovers close to the 2% target, but underlying pressures persist at roughly 2. 5% The BOC projects average inflation of 1. 9% in 2025 and 2. 0% in 2026. GDP growth estimates were reduced to 1. 3% for 2025 and 1 1% for 2026 (down from pre-tariff 1. 8%), reflecting a “permanently lower path” for output. With decisions based on forthcoming labor, price statistics, and U. S. trade policy, the bank indicated it is ready to reduce interest rates if activity slows and inflation falls, and described three scenarios—status quo, escalation, and de-escalation of tariffs—to reflect continuing uncertainty.

Technical Analysis

CAD/JPY is currently trading above the 34- and 55-EMA on the 4-hour chart. The immediate resistance is at 108.25; a breach above this level could shift targets to 108.75/109/110. On the lower side, near-term support is at 107.45, and a break below this support could lead to declines toward 107.25/106.56/105.80/105/104.78/104.50/103.85/103/102.50/10.65/101/100.

Indicator Trends

 CCI (50)- Neutral

ADX (14)-  Neutral

Trading Strategy Recommendation

It is good to buy on dips around 107.45-48 with a stop-loss at 106.84 and a target price of 110.