- The Japanese Yen (JPY) falls for a third day
- BoJ is expected to leave rates unchanged at 0.5%
- The US Dollar (USD) rises against its major peers
- The Fed is expected to leave rates unchanged
The US dollar Japanese yen (USD/JPY) exchange rate is rising for a third straight day. The pair rose 0.52% in the previous session, settling on Monday at 149.40. At 14:30 UTC, USD/JPY trades 0.2% higher at 149.68 and is in a range of 149.26 to 149.93.
The Japanese yen is falling for a third day as it eases back from a 5-month high. Attention is turning to the Bank of Japan’s interest rate decision, where the central bank is widely expected to leave interest rates unchanged at 0.5%, a 17-year high, as concerns over the global economy mount.
The outlook the global economy has changed dramatically since the Bank of Japan raised interest rates in January and meeting held just after Trump’s new term in the White House started.
Investors will be watching closely for any signals from away down relating to the timing of the next move. He will probably indicate there is little rush to press ahead after comments last week noting he was very much worried about the global economy.
Recent data has supported the case for the Bank of Japan to stay on track for further rate increases. Large companies hiked wages by the most in 34 years for a second straight year. Pausing rate hikes will give the central bank time to assess whether higher wages will transfer to higher household consumption.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is +0.08% to 103.45 at the time of writing, rising from a 5-month low.
U.S. dollar is rising on Tuesday as the Federal Reserve’s two-day meeting kicks off. The US central bank is widely expected to leave interest rates unchanged at 4.25 to 4.5% in tomorrow’s rate decision. The decision comes as inflation has cooled 2.8%, but recession fears rise amid concerns over the impact of Trump trade tariffs on the US economy.
Investors will be looking to updated projections from the Federal Reserve for clues into how the policymakers consider Trump’s trade policies will impact growth and inflation. The meeting comes as the market is pricing into potential rate cuts this year, with the possibility of some expecting a third.
Meanwhile, trade tariff news remains focused on reports in the Wall Street Journal that VAT taxes will be considered in Trump’s reciprocal tariffs. The announcement for these tariffs is due on April 2.
