Yen exchange rate today
According to Lao Dong, on September 5, the Japanese Yen (JPY) maintained an advantage over the US Dollar (USD) in the last session of the week, in the context of the market increasingly expecting that the Bank of Japan (BoJ) will maintain a roadmap to tighten policy, while the US Federal Reserve (Fed) may resume the interest rate cutting cycle this month.
Named wages in Japan in July rose 4.1% year-on-year in July, the fastest in seven months and above the forecast of 3%, according to newly released data.
Real wages, an important index reflecting household purchasing power, increased by 0.5% - the first time growth has been positive since December 2024. Meanwhile, consumer inflation (including fresh food prices but excluding rental) reached 3.6%, the lowest level since November 2024 but still above the BoJ's 2% target.
These figures reinforce the view that the BoJ could soon raise interest rates, likely by the end of the year.
Another report showed that household spending in Japan in July increased 1.4% over the same period, lower than the forecast of 2.3%.
However, compared to the previous month after adjusting the seasonal factor, spending increased by 1.7%, exceeding the estimate by 1.3%. This data, along with positive sentiment from trade, has supported the Yen in the Asian trading session.
Donald Trump cuts Japanese auto taxes, USD under pressure Fed cuts interest rates
According to FXStreet, US President Donald Trump has signed a decree to lower the import tax on Japanese cars from 27.5% to 15%, along with some other items. The decision, expected to take effect after seven days, partly eliminates trade uncertainty and raises investor confidence.
In contrast, the US dollar remains under pressure as investors increasingly believe the Fed will cut interest rates in September, with the possibility of at least two 25 basis point cuts from now until the end of the year.
This expectation has made USD buyers cautious, while USD/JPY sellers dominated, especially as the pair is testing the important 148.00 threshold.
The market is currently paying attention to the US non-farm payrolls (NFP) report, due in tonight's New York session. The results show that the NFP will play a key role in shaping the Fed's policy expectations, thereby deciding the short-term trend of the USD and the USD/JPY pair.
