- The Japanese Yen (JPY) falls, extending losses from last week
- US-China trade tensions ease, boosting the market mood
- The US Dollar (USD) falls versus major peers
- FOMC rate decision is this week, with a rate cut expected
The US dollar Japanese yen (USD/JPY) exchange rate is rising after gains last week. The pair rose 1.48% in the previous week, settling on Friday at 152.87. On Monday at 16.30 UTC, USD/JPY trades +0.1% at 153.02 and traded in a range of 152.57 to 153.26.
Japanese yen is inching lower on Monday, extending losses from the previous week, due to safe-haven outflows. The market mood has improved considerably Amid Easing US-China trade tensions. Top US and Chinese negotiators met over the weekend and agreed on a trade framework, paving the way for a deal between Trump and China’s Xi Jinping when they meet on Thursday.
The market mood improved on the news, sending US stocks to record highs while safe havens such as the yen and Gold are under pressure. Gold has declined from last week’s record high of $4381 to $3990 at the time of writing.
The yen fell sharply last week after the new PM, Sanae Takaichi, pledged huge fiscal stimulus, raising concerns about the country’s debt level.
The US Dollar is rising against the yen but falling versus major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling -0.08% at 98.88, after gains last week.
The USD is falling this week against its major peers amid safe-haven outflows and ahead of the Federal Reserve’s interest rate decision later this week. On Wednesday, the Federal Reserve is widely expected to cut interest rates by 25 basis points.
US inflation data on Friday was cooler than expected, supporting the view that the Fed could cut rates. US CPI rose to 3% year on year in September, up from 2.9% in August, but below the 3.1% forecast. Call CPI was also cooler than expected, dropping to 3% from 3.1%.
However, with the ongoing U.S. government shutdown, data is in short supply, leaving the Federal Reserve flying blind. As a result, policymakers may be cautious about another rate cut in December. A whole cash card from the Federal Reserve could boost the US dollar.
