Yen maintains a positive trend
On March 4, the Japanese Yen (JPY) still maintained a positive trend despite the domestic economic data not being very positive. The unemployment rate in Japan unexpectedly increased to 2.5%, while corporate spending decreased for the first time in three years. However, expectations that the Bank of Japan (BoJ) will raise interest rates early, along with market risk concerns, continue to support the JPY - a safe-haven asset.
In addition, former US President Donald Trump's recent statement that Japan may depreciate the Yen also contributed to the increase of the JPY. However, demand for the US Dollar (USD) has helped the USD/JPY pair recover slightly above 149.00. Currently, the foundation factors are still leaning towards the Yen, predicting the possibility of the pair decreasing in price in the coming time.
The "hawl" mentality of the BoJ and the unstable market helps the Japanese Yen maintain its strength
The financial market is increasingly expecting the Bank of Japan to raise interest rates soon, causing the yield on the 10-year government bond to remain near its highest level since 2009. This contributes to strengthening the Yen.
Meanwhile, the international situation continues to have many complicated developments. The meeting between Ukrainian President Volodymyr Zelenskiy and former US President Donald Trump last week did not achieve the expected results, causing the US to temporarily suspend military aid to Ukraine, increasing market instability.
In addition, the Trump administration has also just imposed new tariffs on goods from Mexico, Canada and China. China immediately said it would take retaliatory measures.
Trump also warned Japan and China against devaluating currency for trade benefits. However, Japanese Finance Minister Katsunobu Kato affirmed that Japan does not pursue this policy and has agreed a stance with the US Treasury Department. Japanese Economy Minister Ryosei Akazawa also stressed that the government only intervenes in the currency market when there are signs of excessive speculation.
The latest economic data showed the unemployment rate in Japan increased slightly to 2.5% in January, while corporate spending decreased by 0.2% in the fourth quarter of 2024.
Meanwhile, in the US, the ISM manufacturing index fell to 50.3 in February, showing slowing growth. However, the input price index rose sharply to 62.4 the highest level in nearly three years, raising concerns about inflation. This could force the US Federal Reserve (Fed) to cut interest rates further, putting pressure on the USD.
According to Lao Dong, at 12:00 on March 4, 2025, the Yen exchange rate is currently anchored around 149.381 JPY/USD, the Yen increased slightly by about 0.07%.
