- The Japanese Yen (JPY) rises after losses last week
- The PM’s party loses majority in the upper house
- The US Dollar (USD) falls against its major peers
- Trade worries return ahead of the August 1 deadline
The US dollar Japanese yen (USD/JPY) exchange rate is falling after gains last week. The pair rose 0.96% in the previous week, settling on Friday at 148.83. At 15:30 UTC, USD/JPY is -0.95% lower at 147.42 and trades in a range of 147.34 to 148.67.
Leanne is rising on Monday despite the Japanese ruling coalition losing its majority in the upper house, suggesting that the market wasn’t surprised.
Japanese stock markets are closed for a public holiday, leaving the yen as the main reflection of the result.
Prime Minister Ishiba’s Liberal Democrat party won 47 seats short of the 50 seats needed to ensure a majority in the 248-seat upper chamber, where half the seats were up for grabs. Even so, PM Shiba has vowed to remain in his role despite members of his party discussing a no-confidence motion.
While the yen is gaining today, questions remain over its ability to sustain the move higher.
The US dollar is falling against its major peers. The US dollar index, which measures the USD against a basket of peers, is falling by 0.40% to 98.08, giving back last week’s gains.
U.S. dollar is falling across the board as the focus remains firmly on Trump’s global trade tariffs ahead of the August 1st deadline. In particular, the market is watching for developments between the US and the EU after Commerce Secretary Howard Lutnick said he was confident that a deal between the two could be done before August 1st, which he emphasised with a hard deadline. However, the lack of concrete developments is keeping investors nervous.
Last week, Trump was on the verge of trying to fire Federal Reserve Chair Jerome Powell but backed off after the markets showed signs of instability.
The Fed is widely expected to leave rates unchanged at its July meeting and is fully pricing in a 25-basis-point rate cut in October.
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