USD/JPY faces pressure as Japan-US tariff talks stall at 25% auto levy

USD/JPY retreated 0.2% to 156.85 as markets digested failed tariff negotiations between Japan and the US at the G7 summit. Japanese PM Ishiba confirmed that disagreements persist over the 25% US tariff on Japanese auto imports, raising concerns about bilateral trade relations. The impasse could weigh on Japan's export-dependent economy, potentially influencing BOJ policy decisions. Ishiba's earlier comments supporting cash handouts to combat high prices suggest continued fiscal stimulus, which may pressure the yen further. Technical indicators show USD/JPY testing support at 156.70, with resistance at 157.20. A breakdown below support could target 156.00, while resolution of trade tensions might propel the pair toward 158.00. Traders should monitor upcoming US-Japan trade discussions and any BOJ policy signals for directional cues.