Yen exchange rate today
According to Lao Dong, on May 21, the Japanese Yen (JPY) is showing a strong upward trend and is expected to continue to maintain its upward momentum in the coming time. The main reason comes from expectations that the Bank of Japan (BoJ) will continue to raise interest rates in 2025 - a rather rare move after a long time of maintaining Japan's super-loose monetary policy.
The USD/JPY pair fell sharply below 144.00 the lowest level in two weeks, reflecting a clear upward trend of the Yen against the USD. With the current developments, analysts believe that the Yen will continue to increase strongly in the coming time.
Yen will continue to increase in price
Speaking recently to the National Assembly, BoJ Deputy Governor Mr. Shinichi Uchida said that core inflation in Japan may increase again and remain around the 2% target. If this goes as expected, the BoJ will continue to raise interest rates. In addition, the minutes of the BoJ's most recent meeting also showed that policymakers have not abandoned plans to raise interest rates further.
At the same time, rising tensions between the US and China and expectations of a new trade deal between the US and Japan have made the Yen more attractive to investors as a safe-haven asset.
On the other hand, the US Dollar (USD) is under downward pressure. The reason is that the market increasingly believes that the US Federal Reserve (Fed) will cut interest rates next year, after inflation indicators such as CPI, PPI and US retail data were all better than expected. In addition, Fed officials also expressed concern about the economic outlook and the negative impact of new US trade policies.
New data released on Wednesday morning showed that Japan's trade balance suddenly turned to a deficit in April. However, domestic consumption is increasing thanks to high wages adjusted in the spring - a positive signal for the Japanese economy.
Investors are also closely watching the high-level trade talks between the US and Japan, scheduled to be held in Washington this week. If the two sides reach an agreement soon, the Yen may continue to receive strong momentum, according to FXStreet.
