- 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 rising after losses yesterday. The pair fell -0.28% in the previous session, settling on Monday at 154.64. On Tuesday at 17:00 UTC, USD/JPY trades 0.65% at 155.64 and trades in a range of 154.63 to 156.28.
The Japanese yen has fallen sharply on Tuesday on reports that Prime Minister Sanae Takaichi has reservations about further rate hikes from the Bank of Japan.
The Japanese currency, along with government bond yields, fell on reports that Takaichi had conveyed her reservations about further rate hikes to Bank of Japan governor Ueda.
This injects policy uncertainty into an already complicated backdrop for the Bank of Japan, which is battling a weaker currency that is raising the cost of imported fuel and food.
Prior to these reports, economists had expected the Bank of Japan to raise rates to 1% by the end of June and were pricing in a 70% chance of a hike by April; however, this is looking less likely.
The U.S. dollar is rising across the board. The US dollar index, which measures the USD against a basket of currencies, is rising 0.06% on Tuesday to 97.75 after losses yesterday.
The US dollar is heading higher, recouping some of yesterday’s losses despite ongoing uncertainties surrounding U.S. trade tariffs.
Trump’s 10% global tariffs came into effect today, rather than the 15% he had announced on Saturday; however, there’s still no clarity on what this means for countries that had agreed deals with the US.
A 10% global tariff rate brings with it clear winners and losers for China. This is a positive; however, for other countries such as the EU, this may not be the case. Investors and countries alike are still waiting to find out more.
On the data front, U.S. consumer confidence improved in February, rising to 91.2, up from January’s 84.5, which was the lowest level since May 2014.
