- The Japanese Yen (JPY) rises two days of losses
- Safe haven demand rises on renewed US–China trade war worries
- The US Dollar (USD) is falling against its major peers
- Trade war worries overshadowed data
The US dollar against the Japanese yen (USD/JPY) exchange rate is falling after two days of gains. The pair rose 1.13% in the previous session, settling on Wednesday at 143.20. At 22:00 UTC, USD/JPY trades -0.37% lower at 142.67 and trades in a range of 142.28 to 143.34.
The yen is benefiting from renewed self-haven flows as investors assess the latest developments in the US-China trade war. Hopes that Trump may adopt a softer stance towards China pulled the yen lower over the past two sessions, but optimism faded today, giving the yen renewed strength on safe-haven demand.
Beijing called for the cancellation of sweeping Trump tariffs if the US is serious about resolving the trade war. China also confirmed that no trade talks are currently taking place.
Looking ahead, attention will turn to Tokyo inflation data, which is due out overnight and is expected to show that core CPI rose to 3.2% in April, up from 2.4%. Hot inflation could support a BoJ rate hike sooner rather than later, although given the uncertainty, the central bank may be keen to wait.
The US Dollar is falling versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is 0.4% lower at 99.43 at the time of writing, after rising 0.94% yesterday.
The recent rally in the US dollar has run out of steam and the greenback is falling lower once again against its major peers. Trade tariff concerns and uncertainty are overshadowing relatively solid U.S. economic data.
US jobless claims rose to 222,000 in the previous week, in line with expectations. Meanwhile, the four-week moving average fell to 220250, underscoring a steady downward trend. This suggests that deteriorating consumer and business confidence is not translating into the labour market.
US durable goods jumped 9.2%. However, delving deeper into these figures, we find that this was due to a huge surge in plane orders. Meanwhile, core durable goods orders were weak at 0.1%.
