The Japanese yen fell past 155 per dollar on Tuesday, struggling to regain momentum as the suspension of U.S. tariffs on Mexico and Canada reduced demand for the safe-haven currency.
Japanese yen fell past 155 per dollar
Risk appetite improved slightly following U.S. President Donald Trump’s decision on Monday to “immediately pause” planned tariffs on Mexico and Canada for a month after securing commitments on border enforcement and anti-smuggling measures. However, broader trade tensions remained elevated as U.S. tariffs on Chinese goods officially took effect, prompting Beijing to impose retaliatory levies on select U.S. exports, including oil, gas, coal, cars, and farm equipment, set to begin on February 10.
Eyes on macro
In Japan, investors are closely watching Wednesday’s release of wage figures, which could influence expectations for the Bank of Japan’s (BOJ) monetary policy trajectory. A strong wage report could bolster the case for further tightening, as policymakers look for signs that wage growth is supporting sustainable inflation. The BOJ raised interest rates in January for the first time in over a decade, shifting away from its ultra-loose monetary policy, and has since signaled a readiness to hike rates further if economic conditions and price trends align with forecasts.
Currency market interventions remain a focal point
Meanwhile, ongoing currency market interventions remain a focal point, with Japanese officials reiterating their commitment to addressing excessive yen volatility. Finance Minister Shunichi Suzuki recently emphasized that the government is closely monitoring exchange rate movements and stands ready to take necessary action to prevent disorderly fluctuations. Traders remain cautious amid speculation that Japanese authorities could step in should the yen weaken further, particularly if it approaches the 160 per dollar level, which many analysts view as a potential intervention threshold.
