Yen under pressure near two-week lows amid calm markets and trade talk
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The Japanese yen remained weak during Asian trading on Monday, extending losses for the second consecutive session and approaching two-week lows against the US dollar. Trading conditions were relatively calm, as markets closely monitor ongoing trade negotiations between Japan and the United States aimed at reaching a bilateral agreement.
The USD/JPY pair rose by 0.2% to 143.88, after hitting a session low of 143.53. On Friday, the yen fell 0.75%, marking its third decline in four sessions and briefly touching 144.03, a two-week low, as optimism grew around the prospects of successful trade discussions. Over the past week, the yen weakened by 1.1% against the dollar, posting its first weekly loss in a month as safe-haven demand diminished following efforts by President Trump to stabilize market sentiment.
Trade negotiations remain a key driver for currency movements. Japan and other Asian economies, including South Korea, are working to secure temporary agreements to avert the imposition of high US tariffs once the 90-day pause expires in early July. US Treasury Secretary Scott Bessent reaffirmed the administration’s strategy of applying economic pressure to bring China to the negotiating table, while excluding Beijing from the current rounds of bilateral deals. Trump indicated that discussions with Japan are close to completion, although Japanese officials denied reports suggesting negotiations over adjusting foreign exchange rates between the yen and the dollar.
Meanwhile, attention shifts to the Bank of Japan’s upcoming policy meeting this week. The BOJ is expected to maintain its interest rates steady at 0.5%, the highest level since 2008, despite growing concerns over the impact of the US-led trade war on Japan's export-driven economy. Policymakers are likely to assess how prolonged trade tensions could influence the timing and scope of future monetary policy adjustments.
In this environment, the yen remains vulnerable to further downside pressure, with trade developments and central bank signals set to play a critical role in shaping near-term currency trends.
The USD/JPY pair rose by 0.2% to 143.88, after hitting a session low of 143.53. On Friday, the yen fell 0.75%, marking its third decline in four sessions and briefly touching 144.03, a two-week low, as optimism grew around the prospects of successful trade discussions. Over the past week, the yen weakened by 1.1% against the dollar, posting its first weekly loss in a month as safe-haven demand diminished following efforts by President Trump to stabilize market sentiment.
Trade negotiations remain a key driver for currency movements. Japan and other Asian economies, including South Korea, are working to secure temporary agreements to avert the imposition of high US tariffs once the 90-day pause expires in early July. US Treasury Secretary Scott Bessent reaffirmed the administration’s strategy of applying economic pressure to bring China to the negotiating table, while excluding Beijing from the current rounds of bilateral deals. Trump indicated that discussions with Japan are close to completion, although Japanese officials denied reports suggesting negotiations over adjusting foreign exchange rates between the yen and the dollar.
Meanwhile, attention shifts to the Bank of Japan’s upcoming policy meeting this week. The BOJ is expected to maintain its interest rates steady at 0.5%, the highest level since 2008, despite growing concerns over the impact of the US-led trade war on Japan's export-driven economy. Policymakers are likely to assess how prolonged trade tensions could influence the timing and scope of future monetary policy adjustments.
In this environment, the yen remains vulnerable to further downside pressure, with trade developments and central bank signals set to play a critical role in shaping near-term currency trends.