Japanese Yen Remains Near Multi-Month Highs Against Broadly Weaker USD
The Japanese Yen (JPY) regained some ground after a modest decline the previous day as trade-related uncertainties kept investors on the sidelines and continued to favor traditional safe-haven assets. Additionally, data released today showed that Japan’s core machine orders rose sharply in February, beating market expectations. This, coupled with hopes that Japan will reach a trade deal with the US and growing acceptance that the Bank of Japan (BOJ) will continue to raise interest rates in 2025, turned out to be another factor supporting the JPY.
Meanwhile, the hawkish BOJ expectations marked a major contrast to the growing bets for more aggressive policy easing by the Federal Reserve (Fed). This would lead to a further narrowing of the interest rate differential between Japan and the US, which in turn, supports the prospect of a further appreciation move for the lower-yielding JPY. On the other hand, the US Dollar (USD) slumped to near multi-year lows amid concerns that the Trump administration’s trade policies would hamper US economic growth. This brings the USD/JPY pair close to a six-month low hit last week.
Source: FXStreet
