Yen exchange rate last week
According to Lao Dong, the Yen (JPY) ended the trading day of the week with the exchange rate of JPY/USD increasing to 148.618 JPY/USD. Meanwhile, last week, there was a time when the JPY increased to its highest level in the past 5 months, reaching a record of 147.216 JPY/USD.
The increase in the JPY/USD exchange rate was mainly due to the slight strengthening of the USD. However, the JPY's decline may be limited by expectations that the Bank of Japan (BoJ) will raise interest rates.
According to FXStreet, the BoJ is still closely monitoring the economic situation and may delay raising interest rates if global risks increase. In addition, the interest rate gap between Japan and other countries is narrowing significantly, helping to limit the downward pressure on the JPY.
In contrast, the US dollar cannot maintain a strong increase as the market expects the Fed to cut interest rates in June, July and October to support the US economy.
Japanese Yen weakens despite salary increase
According to Reuters, Rengo - Japan's largest trade union organization - announced an average salary increase of 5.46% for fiscal year 2025. Although this figure is 6.09% lower than the requirement, it is still higher than last year's 5.1%, marking the second consecutive year of the increase exceeding 5%. This shows the improvement in wages in Japan, an important factor in promoting consumer spending and supporting the economy. However, the market is still waiting for the official results of the Shunto spring salary negotiations, due on Friday. Prime Minister Shigeru Ishiba has also called on businesses to continue raising salaries to maintain economic recovery momentum.
In addition, trade negotiations between the US and Canada are showing positive signs, helping to reduce tensions between the two countries. In the US, Democrats and Republicans are said to have reached an agreement to pass a spending bill, helping the government avoid the risk of closing until September. In addition, Russia is considering a proposal for a 30-day ceasefire with Ukraine, which could help ease geopolitical tensions.
In general, although the Yen is under downward pressure, factors such as the possibility of the BoJ raising interest rates, narrowing global interest rate differences and the forecast of the Fed cutting interest rates can help this currency limit the devaluation in the coming time.
