- The Japanese Yen (JPY) is rising after losses yesterday
- Japanese CPI cooled to 1.5% YoY
- The US Dollar (USD) falls against major peers
- Trump announced 15% global trade tariffs
The US dollar Japanese yen (USD/JPY) exchange rate is falling after gains last week. The pair rose 1.55% in the previous week, settling on Friday at 155.07. On Monday at 16:00 UTC, USD/JPY trades -0.38% at 154.48 and trades in a range of 154.00 to 155.05.
The Japanese yen is rising on safe-haven demand amid uncertainty surrounding U.S. trade tariffs following Trump’s 15% global tariff announcement over the weekend.
However, cooler-than-expected Japanese inflation data at the end of last week is limiting the yen’s upside.
On Friday, the national consumer price index for January rose 1.5% year on year, down from 2.1% in December. Meanwhile, core national CPI decelerated to 2%, down from 2.4%.
The data support the view that the Bank of Japan does not need to rush to hike interest rates further. Especially if inflation is below the 2% target
This week, Tokyo CPI data is due, and it could show that the CPI lead indicator remains below the 2% level, keeping gains in the yen capped.
The U.S. dollar is falling across the board. The US dollar index, which measures the USD against a basket of currencies, is falling -0.15% on Monday to 97.65 after gains last week.
The US dollar is falling on Monday as investors continue to assess whether developments in U.S. trade policy will significantly alter the balance of payments
On Friday, the US Supreme Court ruled against Trump’s use of emergency laws to impose reciprocal trade tariffs.
However, over the weekend, President Trump announced an alternative global trade tariff of 15% under Section 122, although he did not say whether these measures would alter current trade deals agreed by the administration.
Looking out across the week, the US economic calendar is relatively quiet, with consumer confidence figures tomorrow and US PPI inflation data on Friday.
The date comes after more hawkish-than-expected FOMC minutes last week and after core PCE rose to 3%.
