- The Japanese Yen (JPY) eases after gains last week
- Safe haven demand falls
- The US Dollar (USD) fell against its major peers
- US-China trade deal worries remain
The US dollar against the Japanese yen (USD/JPY) exchange rate is rising after losses last week. The pair fell 0.53% in the previous session, settling on Friday at 144.10. At 18:30 UTC, USD/JPY is 0.18% higher at 144.35 and in a range of 143.65 to 144.75.
The Japanese yen is falling on Monday with an improved market mood undermining demand for the safe haven yen, and as attention turns to the Bank of Japan interest rate decision tomorrow.
The market improved at the start of the week despite the ongoing conflict between Iran and Israel. This, combined with persistent trade-related uncertainties, could remain a tailwind for the yen.
Attention is now turning to the Bank of Japan’s interest rate decision tomorrow. The central bank is widely expected to leave rates unchanged at 0.5%. However, the central bank is reportedly considering reducing the pace of its Japanese government bond purchases by half from April next year. This is expected to be discussed at the two-day meeting that starts today.
The US dollar is rising against the yen but falling against its major peers. The US dollar index, which measures the USD versus a basket of peers, is falling -0.2% to 97.99, extending losses from last week.
U.S. dollar is falling against its major peers amid improved market mood as investors continued to weigh up the impact of the Iran-Israel war after four straight days of conflict; however, the war has not spread to other countries yet, and international pressures for a deal are raising hopes that an agreement is possible.
Meanwhile, a new report suggests that the US-China deal has left some key issues unresolved, which has raised investors’ concerns.
The July 9 deadline for unilateral trade tariffs with a swathe of trading partners is also coming into focus.
This week is the Federal Reserve interest rate decision whether central bank is widely expected to leave interest rates unchanged but could date tone down its hawkers message after recent soft U.S. data
