Yen exchange rate today
According to Lao Dong, on April 2, the Japanese Yen (JPY) weakened against the US Dollar (USD), as the market worried about the new tax policy from President Donald Trump.
Currently, the USD/JPY pair is still fluctuating below 150.00 due to investors being cautious before having official information about tariffs on Japan and other countries.
The global stock market's recovery is also putting pressure on the Yen, which is considered a safe-haven asset. Investors tend to shift to more risky assets, reducing demand for JPY.
Yen under pressure to decrease but can recover thanks to BoJ
According to FXStreet, despite being under pressure, the Yen still has a chance to recover in the coming time thanks to the difference in monetary policy between the BoJ and the US Federal Reserve (Fed).
While BoJ is showing signs of continuing to raise interest rates to curb inflation, the Fed may cut interest rates in the second half of this year due to weakened US economy. This can narrow the interest rate gap between the two countries and support the yen.
Recent economic data also showed that consumer inflation in Tokyo remains high, reinforcing the possibility that the BoJ will maintain a tighter monetary policy stance.
In contrast, US figures, including the manufacturing PMI index and the employment report, are showing signs of decline. If this trend continues, the USD may gradually lose growth momentum, helping the Yen stabilize again.
Currently, the market is waiting for the US private sector's employment report and factory order figures, before reacting strongly to the USD/JPY pair.
However, the most important factor is the official statement from the Trump administration about the tax policy. If the new tax rates have a strong impact on the Japanese economy, JPY can continue to weaken. Conversely, if BoJ maintains policy stance, the yen can gradually recover in the medium term.
