- The Japanese Yen (JPY) gains adding to last week’s rise
- GDP & householding spending data are due
- The US Dollar (USD) steadies at a 5-month low
- Trump’s tariff policies fuel recession fears
The US dollar Japanese yen (USD/JPY) exchange rate is falling extending losses from last week. The pair fell 1.7% in the previous week, settling on Friday at 148.03. At 15:30 UTC, USD/JPY trades -0.51% lower at 147.24 and is in a range of 146.6 to 147.95.
The Chinese yen is rising on safe haven flows amid growing concerns over a downturn in the US the world’s largest economy. Comments from Trump over the weekend where he failed to rule out a recession in the US due to his flip-flopping trade tariffs policy.
Meanwhile, the yen is also gaining, and there are expectations that the Bank of Japan will hike interest rates again. Japanese GDP data and household spending will be released overnight, and they could provide clues as to the timing of the next hike. Stronger-than-expected GDP and household spending could lift rate hike expectations and boost the yen.
The US Dollar is falling against the yen but is rising against its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is +0.1% to 103.96 at the time of writing, steadying at a 5-month low.
The US dollar is steadying after falling 3.5% last week amid mounting recession worries, despite US non-farm payrolls not being as bad as feared.
Data on Friday showed that the US created 151,000 jobs. This was below the 160,000 the economists had forecast but was still above the 143,000 reported in January. Meanwhile, the unemployment rate unexpectedly ticked up to 4.1% from 4%.
Whilst the data was slightly softer than expected, the market had fared worse following ADP payrolls earlier in the week, which were down at 77,000.
Still, recession fears are haunting the US, with stock markets trading sharply lower as investors sell on recession fears. The Atlanta FedGDP for Q1 forecasts a -2.4% contraction.
