- The Japanese Yen (JPY) rises after losses yesterday
- Safe haven flows rise after weak US data
- The US Dollar (USD) is falling against its major peers
- US ISM services contracted & ADP payrolls were 37k
The US dollar against the Japanese yen (USD/JPY) exchange rate is falling after yesterday’s gains. The pair rose 0.77% in the previous session, settling on Tuesday at 143.82. At 21:30 UTC, USD/JPY is -0.78 % lower at 142.86 and in a range of 142.61 to 144.39.
The Japanese yen is rising on safe haven flows following a series of weak U.S. economic data and rising trade tensions.
President Trump doubled trade tariffs on steel and aluminium from yesterday. Trump is also expected to have a call with China’s President Xi Jinping at some point this week, as trade talks between the two countries have stalled.
Japan remains vulnerable to rising costs from trade tariffs that could threaten its export-driven industries. Trade tariffs are expected to filter through into inflation data, with BOJ governor Ueda warning of the potential negative implications and costs of Trump’s tariff policies.
The US Dollar is falling across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is -0.39% lower at 98.85 at the time of writing, after gains yesterday.
The U.S. dollar is falling as investors digest weaker-than-expected jobs data as well as disappointing service sector figures.
The ADP private payroll showed that just 37,000 jobs were added in May, well below the 120,000 forecast, and I’m from 60,000 in April. The data shows that the US labour market has cooled amid tariff uncertainty and still high interest rates.
The data comes after Jolts jobs openings yesterday unexpectedly increased to 7.39 million, up from 7.2 million, painting a mixed picture. Meanwhile, USISM services PMI unexpectedly dropped into contraction, falling to 49.9, the first sub-50 reading since June 2024. Meanwhile, prices paid rose to 68.7, its highest level since November 2022, a time when CPI inflation was at 7.1%.
The data raises concerns over the outlook for the US economy, weighing on demand for the US dollar.
