- The Japanese Yen (JPY) is falling after gains last week
- BoJ Ueda reiterated a cautious stance to rate hikes
- The US Dollar (USD) falls against its major peers
- Conflicting reports over Trump tariffs inject volatility
The US dollar Japanese yen (USD/JPY) exchange rate rose on Monday, recovering from modest losses last week. The pair fell 0.35% in the previous week, settling on Friday at 157.27. At 22:30 UTC, USD/JPY trades +0.19% higher at 157.54 and in a range of 156.24 to 157.97.
The yen started the week on the back foot after falling more than 10% in the previous year and completing its fourth straight annual decline.
More yen weakness towards the 160 level could spur Japanese authorities to step in to prop up the currency. Authorities have warned that they are prepared to move if needed.
BoJ Governor Ueda reiterated his stance that the central bank could raise rates if economic conditions continue to improve. However, this cautious stance is not enough to encourage yen bulls.
The US Dollar is rising against the yen but falling against major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is down 0.64% to 108.26 at the time of writing after rising 0.88% last week, its fifth straight weekly gain.
The US dollar fell at the start of the week amid choppy trade, fueled by conflicting reports about President-elect Donald Trump’s tariff plans.
The US dollar index dropped as much as 1.07% at its lowest point on reports from the Washington Post that Trump aides were looking to apply less aggressive trade tariffs, easing concerns about wider levees. However, Trump denied the report in a post on his social platform, which saw the dollar sharply pair some of those declines.
The US dollar reached a two-year high of 109.54 last week amid a resilient economy and the potential for higher inflation leading to a slower pace of rate cuts from the Fed.
This week, the US economic calendar is full with Friday’s nonfarm payroll report: the week’s highlight.
