Yen hits two-month high as BOJ signals rate hikes, USD faces tariffs
Press Hub UCapital
Share:
The USD/JPY pair extended its decline, reaching a two-month low of ¥151.30 on Monday, marking its fourth consecutive weekly loss. The japanese Yen is strengthening amid expectations of higher interest rates from the Bank of Japan (BOJ), while the U.S. dollar faces uncertainty due to President Trump’s aggressive tariff agenda.
BOJ signals rate hikes, Yen gains momentum
BOJ policymakers are increasingly leaning toward raising interest rates, with naoki tamura stating last week that rates may need to reach 1% in the latter half of fiscal 2025. Higher rates increase the Yen’s attractiveness, making it more appealing in global markets. Technically, the Yen has broken through all major simple moving averages (50, 100, and 200), signaling a potential trend reversal. Traders are eyeing the ¥148.80 level, a critical support zone, as the next target.
U.S. tariffs, inflation data to drive Dollar moves
On the U.S. side, President Trump’s tariff policy remains a major market driver. The administration is expected to announce reciprocal tariffs on multiple countries, a move that could disrupt global trade and impact the Dollar’s strength. Tariffs tend to boost domestic industries but can also lead to weaker currency performance if they slow economic growth. Key events to watch this week: U.S. inflation report (wednesday): markets expect a reading that could influence federal reserve policy; FED chair Jay Powell’s testimony (Wednesday): his comments on inflation and rate cuts will likely trigger volatility in currency markets.
Outlook for USD/JPY
The Yen’s strength hinges on continued hawkish signals from the BOJ and a potential retreat in the Dollar amid tariff fears. A break below ¥150 could accelerate the move toward ¥148.80, reinforcing the Yen’s bullish momentum. Meanwhile, a stronger-than-expected us inflation report could provide temporary relief for the Dollar, keeping the pair volatile throughout the week.
BOJ signals rate hikes, Yen gains momentum
BOJ policymakers are increasingly leaning toward raising interest rates, with naoki tamura stating last week that rates may need to reach 1% in the latter half of fiscal 2025. Higher rates increase the Yen’s attractiveness, making it more appealing in global markets. Technically, the Yen has broken through all major simple moving averages (50, 100, and 200), signaling a potential trend reversal. Traders are eyeing the ¥148.80 level, a critical support zone, as the next target.
U.S. tariffs, inflation data to drive Dollar moves
On the U.S. side, President Trump’s tariff policy remains a major market driver. The administration is expected to announce reciprocal tariffs on multiple countries, a move that could disrupt global trade and impact the Dollar’s strength. Tariffs tend to boost domestic industries but can also lead to weaker currency performance if they slow economic growth. Key events to watch this week: U.S. inflation report (wednesday): markets expect a reading that could influence federal reserve policy; FED chair Jay Powell’s testimony (Wednesday): his comments on inflation and rate cuts will likely trigger volatility in currency markets.
Outlook for USD/JPY
The Yen’s strength hinges on continued hawkish signals from the BOJ and a potential retreat in the Dollar amid tariff fears. A break below ¥150 could accelerate the move toward ¥148.80, reinforcing the Yen’s bullish momentum. Meanwhile, a stronger-than-expected us inflation report could provide temporary relief for the Dollar, keeping the pair volatile throughout the week.