According to FXStreet, on November 26, the Japanese Yen (JPY) increased slightly against the US Dollar (USD).
Accordingly, US President-elect Donald Trump's threat to impose new taxes has made investors worried, pushing them to seek safe assets such as JPY.
Donald Trump announced that he would impose a 25% tariff on goods from Mexico and Canada, and a 10% tariff on goods from China. This raised concerns about the economic impact, causing investors to reduce their investments in risky assets and switch to the Japanese yen to protect their capital.
Fed officials have also sent mixed signals about interest rate policy. Some say the Fed could continue to cut rates, but those expectations are fading amid concerns that Trump's policies could fuel inflation.
Still, uncertainty over when the Bank of Japan (BoJ) will raise interest rates next is dampening the yen's upside momentum.
US government bond yields rose on expectations that Mr Trump’s policies could lead to higher inflation, forcing the US Federal Reserve to cut interest rates more slowly. This supported the recovery of the USD and limited the strength of the JPY. Many investors are waiting for the FOMC meeting minutes for more information on the direction of interest rate policy in the coming time.
In summary, the Japanese Yen is supported by safe-haven factors, but uncertainty from the BoJ and the strength of the USD are limiting the currency's upside potential.
