- The Japanese Yen (JPY) falls after gains last week
- The yen rose last week on rate hike bets
- The US Dollar (USD) rises versus major peers
- Trump announces 25% tariffs on steel & aluminium imports
The US dollar Japanese yen (USD/JPY) exchange rate is rising after four straight weeks of losses. The pair fell 2.40% in the previous week, settling on Friday at 151.40. At 21:30 UTC, USD/JPY trades 0.36% higher at 151.95 and is in a range of 151.23 to 152.54.
Jen is weakening, Moving away from a two-month high against the US dollar after weaker-than-expected Japanese current account data. The Ministry of Finance reported that the current account balance was 1077 points ¥3 billion, which is 1/3 of the November reading of 3352 points ¥5 billion.
Last week, the yen outperformed its major peers on rising speculation that the Bank of Japan will raise interest rates further, reducing the interest rate differential with other countries.
Meanwhile, the yen has also been benefiting from safe-haven plays, including gold, which rose to a record high.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is +0.25% to 108.31 at the time of writing, marking the third day of gains.
The U.S. dollar is rising versus its major peers as markets digest Friday’s labour market data and Trump’s announcement of more trade tariffs.
President Trump announced a 25% tariff on steel and aluminium imports, raising worries over inflation and global trade tensions. He said these imports were in addition to tariffs already levied.
Trade tariffs are expected to be inflationary. According to the CME Fed watch tool, the market is pricing in a 90% probability that the Fed will leave rates unchanged in the March 19 meeting. Opposing rate cooks give the Fed the opportunity to see better U.S. economic exceptionalism continue and assess Trump’s policies.
US CPI inflation is due this week, and prices are expected to rise by 0.3% month on month.
