Yen exchange rate last week
According to Lao Dong, after falling to the bottom against the USD at the beginning of the week, the Yen rebounded on May 30.
The main reason comes from the surprise decision of a US federal appeal court when restoring a series of trade tariffs by President Donald Trump. This move caused a stir in the global market and investors quickly returned to safe-haven assets such as the Japanese Yen.
Besides political factors, positive economic figures from Japan also contribute to strengthening the strength of the Yen. Specifically, the consumer price index (CPI) in Tokyo increased by 3.4% over the same period last year, while the core CPI - excluding fresh food - an increase of 3.6%, beyond the forecast and continued to maintain on the target of 2% of the Central Bank of Japan (BOJ) for the third month in a row.
In addition, retail sales in April increased by 3.3% over the same period a positive figure, supported by the widespread salary increase trend in Japan. Although industrial output in the same period decreased by 0.9%, this decrease was lower than expected and the survey showed that output could rebound in May.
These signals are raising expectations that the BoJ will continue to tighten monetary policy, which could further support the Yen exchange rate in the coming time.
However, by the weekend, JPY's rise somewhat slowed down when the dollar recovered slightly. The market is waiting for the results of the PCE announcement - the favorite inflation measure of the US Federal Reserve (Fed). Previously, the US quarter of GDP data was only 0.2%, less than forecast, but the number of unemployment benefits increased sharply to 240,000 applications - causing investors to wonder the ability to adjust interest rates from the Fed in the near future.
Forecast for next week
According to FXstreet, the Yen exchange rate may continue to fluctuate strongly next week, depending on two key factors: the market's reaction to US PCE data and subsequent developments related to US - China trade policy. While domestic data in Japan is supporting the JPY's upward trend, any "hawl" signal from the Fed could cause the USD to recover strongly and put back pressure on the Japanese Yen.
