- The Japanese Yen (JPY) is rising for a fourth day
- JPY benefits from safe-haven flows & BoJ rate hike
- The US Dollar (USD) falls against its major peers
- Trump has been less hostile than feared over trade
The US dollar Japanese yen (USD/JPY) exchange rate is falling on Monday for a fourth straight day. The pair fell 0.20% in the previous week, settling on Friday at 155.98. At 18:30 UTC, USD/JPY trades 1% lower at 154.40 and is in a range of 153.72 to 156.26
Japanese yen on the Swiss franc moved higher against major currencies on Monday on safe-haven flows amid a sell-off in tech stocks as investors weighed up the implications of a Chinese startup launching a free open-source AI model.
China’s deep seek starter rolled out a free artificial intelligence assistant, saying it uses lower-cost chips and less data. The development challenges vets in the market that AI will drive demand longer supply chain from chipmakers to data centres.
These latest developments came after the Bank of Japan raised interest rates by 0.5% on Friday reaching its highest level in 17 years.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is down 0.04% to 107.40 at the time of writing, extending last week’s losses.
The US dollar is falling after recording its largest weekly loss in more than a year last week. This is due to expectations that any trade tariffs implemented by President Trump will be lower than previously feared.
While the market had been expecting Trump to adopt a more aggressive approach to trade tariffs in his first week, the new US president almost suggested that China could negotiate its way out.
News that the US and Colombia were on the brink of a trade war is keeping the market on edge.
Attention will now turn to the US Federal Reserve interest rate decision on Wednesday. The Fed is widely expected to leave interest rates unchanged at 4.25 to 4.5%, which will give the US central bank time to see what measures and policies Trump implements.
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