Yen exchange rate today
According to Lao Dong, on March 13, the Yen (JPY) increased against the US Dollar (USD), ending a two-day streak of depreciation.
Accordingly, the chaos in President Donald Trump's tariff implementation and concerns about their impact on the global economy have boosted demand for JPY - a safe-haven asset.
The latest update at 12:00 on March 13 shows that the Yen exchange rate against the US Dollar is currently fluctuating around 147.728 USD/JPY, meaning 1 USD can be exchanged for about 147 JPY.
Expectations of interest rate hike from BoJ and trade tensions support the Yen
Donald Trump has officially imposed a 25% tariff on imported steel and aluminum, warning that he will respond to any backlash from the European Union and Canada. He also threatened to announce "if-yet" tariffs next month for many other countries, raising concerns about the risk of escalating trade wars. These risks continue to strengthen the JPY's upward momentum.
Expectations that the Bank of Japan (BoJ) will continue to raise interest rates in the context of high inflation also contribute to supporting the JPY. According to FXStreet, Japanese enterprises have agreed to increase salaries for the third consecutive year to help workers cope with inflation, thereby boosting consumer spending and creating more inflationary pressures. This could give the BoJ more reason to continue its monetary policy tightening cycle. The yield on the Japanese 10-year government bond is currently approaching its highest level since the global financial crisis in 2008.
Conversely, in the US market, expectations that the US Federal Reserve (Fed) will cut interest rates many times this year continue to put pressure on the USD. The US consumer price index (CPI) in February increased 2.8% year-on-year, down from 3% the previous month, showing that inflation is cooling. This further strengthens predictions that the Fed will ease monetary policy more strongly than originally planned, weakening the USD and pulling the USD/JPY pair below 148.00.
