Japanese Yen Strengthens on Safe-Haven Demand
The Japanese yen strengthened past 148 per dollar on Friday, reaching a five-month high amid increased safe-haven demand, driven by the escalating global trade war and President Trump’s shifting tariff policies. These developments raised concerns about the potential repercussions for the US economy, prompting traders to shift from the US dollar to the yen and Swiss franc. Domestically, both the yen and Japanese government bond yields have been supported by strong expectations that the Bank of Japan will continue raising interest rates this year. BOJ Deputy Governor Shinichi Uchida noted this week that the central bank could further increase rates if its economic forecasts are met, signaling that the exit from its extensive monetary easing program has only just begun. Uchida also emphasized that monetary conditions remain highly accommodative, highlighting that the BOJ’s reduction in Japanese Government Bond holdings has been limited.
Source: Trading Economics
