Yen exchange rate today
According to Lao Dong, on October 15, the Japanese Yen (JPY) continued to increase as the USD weakened widely due to concerns about trade tensions and increasing geopolitical risks.
The USD/JPY pair fluctuated around 151.00 a weekly low, showing demand for safe-haven currencies like the Japanese Yen remains strong.
The main reason comes from recent fluctuations in US-China trade relations. After China announced new special fees for US ships and tightened rare earth exports, US President Donald Trump threatened to increase import tariffs on Chinese goods to 100%, and said he could end some trade activities such as importing cooking oil and agricultural products.
This development raises concerns about the risk of escalating a trade war between the world's two largest economies, causing investors to shift to holding safe-haven assets such as the JPY.
Escalating tensions benefit the Yen
According to FXStreet, the news that Mr. Trump is considering sending Tomahawk cruise missiles to Ukraine to put pressure on Russia further increases geopolitical risks, continuing to support the Yen.
Japan's political situation remains uncertain after the ruling coalition between the Liberal Democratic Party (LDP) and Komeito collapsed.
According to Kyodo, the Japanese parliament has not yet agreed on a vote schedule to elect a new prime minister, scheduled for October 21. This could prompt the Bank of Japan (BoJ) to delay the rate hike plan, somewhat reducing the yen's upward momentum.
However, a recent statement from Japanese Finance Minister Katsunobu Kato, alluding to the possibility of government intervention to support the domestic currency, has helped the JPY maintain its upward momentum.
On the other hand, in the US, the situation of the federal government's partial shutdown since October 1 has not been resolved after the Senate rejected the Republican Interim Sponsorship bill. This further increases the pressure on the USD.
According to CME Group's FedWatch tool, the market is now expecting the US Federal Reserve (Fed) to cut interest rates by 0.25 percentage points in October and have a 90% chance of continuing to cut in December. The prospect of the Fed loosening currency while the BoJ could still tighten policy weakens the USD, thereby helping the Yen maintain its upward trend.
