Japanese yen expands gains to four-week high in a strong start
The Japanese yen rose in Asian trade on Monday against a basket of major rivals, expanding gains for the second straight session against the dollar and hitting a four-week high on haven demand amid concerns about US debt levels following Trump’s tax reform bill.
The gains are boosted as well by increasing inflationary pressures on Bank of Japan’s policymakers, which boosted the odds of a rate hike in June.
The Price
The USD/JPY fell 0.25% today to 142.22 yen per dollar, the lowest since April 30, with a session-high at 143.08.
The yen rose 1% on Friday on the dollar, the eighth profit in nine days on haven demand as Trump threatened the EU and Apple with new tariffs.
The yen also rose 2.1% last week against the dollar, marking the first weekly profit in five weeks, and the largest in a month and a half on growing concerns about US financial stability.
US Debt Levels
US President Donald Trump said on Sunday that his tax reform bill will likely undergo big changes in the Senate.
According to the Congressional Budget Office, the bill will add $3.8 trillion to the government’s $36.2 trillion debt pile in the next ten years.
The huge US debt burden is back in the spotlight after Moody’s US credit rating downgrade last week and weak demand on government notes.
Japanese Rates
Earlier Japanese data showed consumer prices rose 3.5% in April, the highest pace since early y023, beating estimates of 3.4%, and up from 3.2% in March.
Following the data, the odds of a Japanese 0.25% interest rate hike in June rose from 30% to 40%.
Bank of Japan Deputy Governor Shinichi Uchida said the bank will continue to raise interest rates if the economy recovers from the negative impact of US tariffs, however he still cautioned that the economic outlook remains highly uncertain.
Now traders await important Japanese data on inflation, unemployment, and wages to gather more clues.
Arabica coffee price tumbles to four-week trough
The price of Arabica coffee beans dropped on Friday to a four-week trough on forecasts of better harvests and supplies in Brazil.
Arabica coffee July futures fell 0.75% as of 13:35 GMT to $3.581 a pound, reducing losses after hitting four-week lows.
IBM analysts said in a memo that lower prices from the recent records came as the outlook improved for the Brazilian harvest.
Additionally, Robusta coffee July futures also fell 0.65% to $4765 a ton, after plumbing a month low at $4705.
Otherwise, the dollar index fell 0.9% as of 20:04 GMT to 99.07, with a session-high at 99.9, and a low at 99.05.
Ethereum driven lower by weaker risk appetite, Trump's tariff threats
Ethereum fell on Friday amid weakness in the performance of most cryptocurrencies as the risk appetite tumbled following Trump’s new tariff threats.
Trump complained that dealing with the EU is proving very difficult, and recommended imposing 50% tariffs on the EU starting June 1
The new moves come in a time when trade tensions diminished somewhat after a brutal cycle of fear and concerns in April that almost pushed S&P 500 into bearish territory, before Trump paused most reciprocal tariffs.
Investors were returning to the “Buy America” mindset after the US made trade deals with China and the UK with hopes of even more deals to come, but recent measures by Trump damaged such expectations.
Before Friday’s losses, the main indices were already starting to fall due to concerns about higher US treasury yields, with the S&P 500 falling 2% this week, and Dow Jones losing 1.9%, while NASDAQ gave up 1.5% so far since Monday.
Earlier on Thursday, the House of Representatives passed Trump’s massive tax reform bill, and sent it to the Senate, with concerns growing about the massive cost of the plan to the debt burden.
Ethereum
On trading, ethereum fell 3.3% on Coinmarketcap as of 20:26 GMT to $2567.6, marking a 0.6% weekly loss.
Loonie rises over 1% after retail sales data
The Canadian dollar rose against most major rivals on Friday following retail sales data.
Earlier government data showed retail sales rose 0.8% in March, beating estimates of a 0.6% rise, while core sales fell 0.7%.
On trading, the CAD/USD pair rose 1% as of 20:20 GMT to 0.7290.
Aussie
The Australian dollar rose 1.3% as of 20:20 GMT to $0.6497.
US Dollar
The dollar index fell 0.9% as of 20:04 GMT to 99.07, with a session-high at 99.9, and a low at 99.05.
Trump complained that dealing with the EU is proving very difficult, and recommended imposing 50% tariffs on the EU starting June 1
The new moves come in a time when trade tensions diminished somewhat after a brutal cycle of fear and concerns in April that almost pushed S&P 500 into bearish territory, before Trump paused most reciprocal tariffs.
Investors were returning to the “Buy America” mindset after the US made trade deals with China and the UK with hopes of even more deals to come, but recent measures by Trump damaged such expectations.
Before Friday’s losses, the main indices were already starting to fall due to concerns about higher US treasury yields, with the S&P 500 falling 2% this week, and Dow Jones losing 1.9%, while NASDAQ gave up 1.5% so far since Monday.
Earlier on Thursday, the House of Representatives passed Trump’s massive tax reform bill, and sent it to the Senate, with concerns growing about the massive cost of the plan to the debt burden.