Yen exchange rate today
According to Lao Dong, on May 12, the Japanese Yen (JPY) fell to its lowest level in a month against the US Dollar (USD) after the US and China announced a new agreement on tariffs, creating optimism in the global market and causing safe-haven assets such as the JPY to sell off.
Trade tensions decrease, Yen loses appeal
According to the joint statement, the US will adjust the tariffs on Chinese goods, with the basic tariffs reduced to 10%. China also agreed to temporarily suspend tariffs on US goods for 90 days.
This information has investors expecting trade tensions between the world's two largest economies to ease, thereby boosting the global stock market to increase sharply and reducing demand for holding risk-off assets such as the Yen.
At the same time, the combination of US -China negotiations and the "hawk" viewpoint (which is cautious with lower interest rates) of the US Federal Reserve (Fed) has pushed the USD to the highest level since mid -April. This has increased the USD/JPY exchange rate to the 146.5 landmark and is likely to continue to increase in the coming time.
In Japan, rising household spending data and three consecutive months of real-estate wage cuts have raised concerns that domestic prices could continue to climb. Although this may cause the Bank of Japan (BoJ) to continue raising interest rates, instability from global trade has caused them to remain cautious. BoJ Governor Kazuo Ueda also acknowledged that the goal of raising core inflation to 2% will be delayed, but the bank is still ready to raise interest rates if the inflation trend continues.
Investors are paying attention to the US inflation report due this week and the speech of Fed Chairman Jerome Powell. In addition, Japan's Q1 GDP report will also be an important factor affecting the USD/JPY pair in the coming days.
