Yen exchange rate today
According to Lao Dong, on May 9, the Japanese Yen (JPY) recorded a strong recovery after reaching a 4-week low against the USD. The reasons come from two main factors: increased demand for safe-haven assets in the context of escalating geopolitical tensions and expectations that the Bank of Japan (BoJ) will continue to raise interest rates.
Yen unexpectedly benefits, but still risks
According to FXStreet, data released by the Japanese government showed that household spending in March increased by 0.4% compared to the previous month and increased by 2.1% compared to the same period last year - all exceeding market expectations. This increases the likelihood that the BoJ will not soon stop its monetary tightening policy. Minutes from the BoJ's March meeting, released yesterday, also showed that the bank is ready to continue raising interest rates if inflation remains steady.
However, besides the positive signal, there are still some risk factors. Real wages in Japan continue to fall for the third consecutive month, while inflationary pressures have not cooled down significantly. This makes investors more cautious about the prospects for Japanese economic growth in the first quarter, ahead of the GDP report due next week.
On the other hand, the USD is adjusting slightly after peaking nearly a month ago. Although the US Federal Reserve (Fed) has temporarily suspended interest rate increases, it still maintains the "hawl" view and has not yet signaled a cut in the coming time. This helps the greenback maintain relative strength and curb the JPY's strong increase.
In addition, global market sentiment is positive thanks to two supportive information: the US-UK trade deal that has just been signed and the expectation of US-China tariff negotiations taking place over the weekend in Switzerland. These factors contribute to easing concerns about the US economic recession and supporting the global stock market.
The USD/JPY exchange rate fluctuated below 146.00. Investors are waiting for speeches from many influential members of the Fed to find more clues about interest rate policy, thereby adjusting trading strategies at the weekend.
