- Japanese Yen (JPY) rose on Friday but fell across the week
- Japanese inflation cooled to 2.4% YoY in September
- US Dollar (USD) rose across the week
- the Trump trade boosted USD
The US Dollar Japanese Yen (USD/JPY) exchange rate fell on Friday after two days of gains. The pair rose 0.39% in the previous session, settling at 150.20. At 21:00, USD/JPY traded -0.45% at 149.52 and is in a range of 149.35 to 150.28. The pair booked gains across the week of 0.26%, the third week of gains.
The Japanese yen rose on Friday as the market digested the latest inflation data for the region. Japanese inflation eased to 2.4% year on year in September, down from 2.8% in August. While there was the first cooling inflation in five months, it was still hotter than expected.
Still the yen continued to weaken across the week as the market has reined in Bank of Japan rate hike expectations. While BoJ policymakers have sounded less hawkish recently, the new Prime Minister has also been clear that now is not the time for the BoJ to hike rates.
The BoJ is expected to leave rates unchanged at the October meeting.
The US Dollar fell across the board on Friday. The US Dollar Index, which measures the greenback against a basket of major currencies, fell to 103.49 at the time of writing, down 0.33%, snapping a two-day winning run but gained across the week, its third straight weekly gain.
The USD rose across the week as the market reined in aggressive Federal Reserve rate cut expectations and amid te rise of the Trump trade.
The USD rose as Trump’s chances of winning the US Presidential election in November appear to be on the up. His core policies regarding tax and tariffs are inflationary, meaning that the Fed may have less ability to cut rates in 2025.
The market is currently pricing in around a 95% chance of the Federal Reserve cutting rates by 25 basis points in the November meeting.
