- The Japanese Yen (JPY) rises after yesterday’s losses
- Safe haven demand rises as the US–China trade war continues
- The US Dollar (USD) is falling against its major peers
- US Fed Powell warned over the impact of trade tariffs
The US dollar against the Japanese yen (USD/JPY) exchange rate is falling after modest gains yesterday. The pair rose 0.13% in the previous session, settling on Tuesday at 143.16. At 22:00 UTC, USD/JPY trades -0.98% lower at 141.75 and is in a range of 141.64 to 143.18.
The yen is rising on safe haven flows amid concerns over the escalating US–China trade war. President Trump launched a new probe into tariffs on critical mineral imports in retaliation for China’s escalating export controls. The Trump administration is also restricting AI chip exports to China, pulling stocks such as Nvidia sharply lower.
Concerns about the outlook for the US economy, as US-China trade tensions escalated, kept investors in search of safe-haven assets such as the yen, Swiss Franc, and Gold. Gold rose to above $3340 per ounce.
The US Dollar is falling versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is 0.96% lower at 99.25 at the time of writing, after rising 0.58% yesterday.
The US dollar is falling to a three-year low amid escalating US-China trade tensions and following Federal Reserve Chair Jerome Powell’s speech.
Meanwhile, investors shrugged off better-than-expected US retail sales, which rose 1.4% month over month in March above the 1.3% forecast.
Federal Reserve chair Jerome Powell commented at the Economic Club of Chicago that the US economy appears to be slowing, and consumer spending is modest as sentiment sours. Powell suggested that the Fed could hold its interest rates on hold to wait for greater clarity before considering any further rate cuts.
Powell warned of potentially difficult economic times if tariffs stay at these levels. He expects sticky inflation and a hit to growth, confirming the market fears. There was no indication that the Fed would step in to support.