USD/JPY Hits High for 4th Consecutive Day
The Japanese yen weakened against the US dollar on Tuesday (May 12), pushing USD/JPY up for a second day and hitting a four-day high around 157, although gains remained limited.
The initial trigger came from disappointing Japanese household spending data. The Ministry of Home Affairs reported that consumer spending fell 2.9% year-on-year in March, deepening the 1.8% decline in the previous month, extending the contraction to four consecutive months amid inflationary pressures.
On the global sentiment front, waning optimism about a US-Iran peace deal kept the risk premium alive, including through concerns about the Strait of Hormuz. US President Donald Trump called the ceasefire "massive life support," strengthening the dollar's position as a safe haven.
Market participants are now awaiting the release of US consumer inflation (CPI) figures, which could potentially alter expectations for Fed policy and the dollar's future direction. So far, the market is said to have begun reducing bets on a Fed rate hike in 2026, but the dollar remains supported by unstable risk conditions.
At the same time, the Bank of Japan's relatively hawkish tone could be a factor holding back USD/JPY gains, after the minutes of its April meeting opened the door to an imminent interest rate hike. The market will be monitoring the combination of US CPI, BoJ policy signals, as well as developments in US-Iran tensions and the risk of disruptions in Hormuz. (asd)
Source: Newsmaker.id
