The yen fell in Asian trade on Monday against a basket of major rivals, resuming losses against the US dollar and approaching five-month lows once more after the Bank of Japan’s warnings and divisions among policymakers on the prospect of raising interest rates in January.

The price is also pressured by concerns about the interest rate gap between Japan and the US following the Federal Reserve’s latest policy meeting, which was more bullish than expected.

The Price 

The USD/JPY rose 0.15% today to 157.99 yen per dollar, with a session-low at 157.65.

The yen rose 0.8% on Friday against the dollar amid attempts to recover from five-month lows at 158.08.

The yen gained ground back then following strong Japanese inflation and retail sales data. 

The yen also lost over 0.9% last week against the dollar, the fourth weekly loss in a row as US treasury yields gained ground.

BOJ

The Bank of Japan’s latest meeting minutes showed divisions, with some policymakers more confident about raising interest rates in the short term, while others are still cautious due to uncertainty about wages and Trump policies.

Bank of Japan Kazuo Ueda said last week the bank expects the economy to approach its 2% inflation target sustainably next year.

The current odds of a BOJ 0.25% interest rate hike in January stood at 55%, with investors now waiting for more inflation and labor data to gather more clues.

US Rates

According to the Fedwatch tool, the odds of a 0.25% US interest rate cut in January stood at 11%, with investors waiting for crucial US labor data next week to gather more clues.

Yen Outlook

Sydney Bank’s analysts said in a memo that the upward USD/JPY trend might be overdone, which could pave the way to a correction.

They also pointed to the possibility of an intervention by Japanese authorities in the case of a rapid spike in the USD/JPY pair.

Most commodity currencies fell on Friday amid calm trading as investors gear up for the New Year holiday.

A spate of crucial events will take place in 2025, first of which is the inauguration of US President-elect Donald Trump and its expected positive impact on the crypto market. 

Earlier government data showed the US trade deficit grew by 5% to $102.9 billion in November from $98.3 billion in October, which could prompt US President-elect Donald Trump to go ahead with his tariffs to reduce the deficit. 

Investors are now preparing for the New Year holiday, which would entail a reorganization of their investment portfolios, and maybe liquidating some assets.

The Dollar

The dollar index fell 0.1% as of 20:37 GMT to 108.03, with a session-high at 108.2, and a low at 107.8.

Loonie

The Canadian dollar fell 0.1% against its US counterpart as of 20:59 GMT to $0.6937.

Aussie 

The Australian dollar inched down 0.1% against its US counterpart to 0.6215.

Ripple gained ground on Friday amid calm trading as investors gear for the new year. 

A spate of crucial events will take place in 2025, first of which is the inauguration of US President-elect Donald Trump and its expected positive impact on the crypto market. 

Earlier government data showed the US trade deficit grew by 5% to $102.9 billion in November from $98.3 billion in October, which could prompt US President-elect Donald Trump to go ahead with his tariffs to reduce the deficit. 

Investors are now preparing for the New Year holiday, which would entail a reorganization of their investment portfolios, and maybe liquidating some assets.

Ripple 

On trading, Ripple rose 0.9% on Coinmarketcap as of 20:55 GMT to $2.17, but marked a weekly loss of 4.1%.

Gold prices fell on Friday under pressure from the higher US treasury yields as markets focus on the return of US President-elect Donald Trump to his post and the inflationary impact of his policies. 

Analysts expect gold purchases by global central banks during 2025 to push gold prices above $3000, potentially by the summer.

Gold is up 28% in 2024, boosted by the new cycle of Federal Reserve interest rates and mounting global geopolitical tensions.

Otherwise, the dollar index fell 0.1% as of 20:37 GMT to 108.03, with a session-high at 108.2, and a low at 107.8.

On trading, gold February futures fell 0.9% today, or $22 to $2631.9 an ounce, marking a weekly loss of 0.5%.