Yen exchange rate today
According to Lao Dong, on April 29, the Japanese Yen (JPY) weakened against the US Dollar (USD), mainly due to improved investor risk-taking sentiment.
The reason is that the tension between the US and China shows signs of cooling down, making the need to hold safe shelter assets such as the yen. At the same time, investors buy in USD when the price decreases has pushed the USD/JPY exchange rate to a high level of the day, approaching the 142.50 milestone.
The decline will not last long
However, according to FXStreet, the weakness of the yen may not last long, when the market is waiting for the monetary policy decision of the Japan Bank of Japan (BOJ), expected to be announced on Thursday on April 29. Boj is expected to keep interest rates in the context of domestic economic fragile and face risks from new US tax rates. However, the signs that inflation continues to increase in Japan also opens the possibility of BoJ will tighten monetary policy in the near future.
On the US side, new statements from Finance Minister Scott Bessent show that many countries have proposed very good tariffs. This, combined with expectations that the US and China could make progress in trade negotiations, has supported market sentiment. However, the situation remains contested as President Donald Trump insists negotiations are ongoing, while China denies it.
Meanwhile, investors are expecting the Fed to resume the interest rate cutting cycle from June, with a total reduction of 1 percentage point before the end of 2025. If this happens, the interest rate gap between the US and Japan will narrow, which could support the Yen.
Another factor that could affect the market is the 72-hour ceasefire unilaterally declared by Russian President Vladimir Putin during the conflict in Ukraine, although Ukraine has denied it. This leaves geopolitical risks high and could continue to support the Yen as a safe-haven asset.
This week, important US data such as the personal consumption expenditure (PCE) index, job opportunities (JOLTS) and the non-farm payrolls (NFP) will be released, contributing to shaping market expectations for the Fed's monetary policy in the coming time.
