Yen exchange rate today
According to Lao Dong, on July 1, the Japanese Yen (JPY) continued to increase against the USD, trading near a three-week high.
Market confidence in the Yen was strengthened after the Bank of Japan's (BoJ) Tankan survey showed that business confidence of major producers improved for the first time in two quarters, reaching 13 in the second quarter, exceeding market forecasts.
In addition, businesses predict that consumer prices in Japan will continue to exceed the BoJ's target of 2% in the next 5 years, raising expectations that the BoJ will continue to raise interest rates in the coming time.
Japanese Yen becomes a safe haven as the Fed is about to lower interest rates
According to FXStreet, despite trade tensions with the US when President Trump threatened to impose a 25% tax on Japanese cars and criticized Japan for not buying US rice, the Yen still maintained its position as a safe asset in the context of a weakening USD.
Head of the Japanese trade negotiation delegation Ryosei Akazawa returned from the 7th round of talks with the US without a breakthrough, but affirmed that Japan will continue to protect economic interests in negotiations. Trump also suggested that trade talks with Tokyo could end before the deadline of July 9, adding pressure on bilateral trade relations.
Meanwhile, the US dollar continued to be under strong selling pressure when it fell 2.6% in June as the market believed that the US Federal Reserve (Fed) could soon return to the interest rate cutting cycle. The market is currently placing a 74% probability of the Fed cutting interest rates in September, while a cut in July is considered less likely.
In addition, the US Senate's approval of Trump's major spending bill discussion procedures, which are expected to increase the budget deficit by more than $3.3 trillion over the next 10 years, is also increasing the pessimistic sentiment towards the USD.
