Yen moves in a positive zone as the week opens up

The Japanese yen rose in the Asian market on Monday at the start of the week’s trading against a basket of global currencies, approaching again its highest levels in two weeks against the US dollar, as markets await the release of more economic data and comments that could provide strong evidence on the path of Japanese interest rates this year.

The US currency fell toward its lowest level in two weeks, pressured by strong expectations that the Federal Reserve will cut interest rates at least twice before the end of this year.

Price Overview

• USD/JPY today: The dollar fell against the yen by 0.2% to (147.43¥) from the opening price of (147.701¥), recording a high of (147.79¥).

• The yen lost 0.4% against the dollar at Friday’s close, its first loss in three days, as part of a correction and profit-taking from the two-week high at 146.62 yen, in addition to the release of grim economic data in Japan.

• The Japanese yen fell by 0.25% against the US dollar last week, marking its first weekly loss in three weeks, due to a recovery in US yields.

Japanese Interest Rates

• Minutes of the June monetary policy meeting showed that some members of the Bank of Japan’s board said the central bank would consider resuming interest rate hikes if trade tensions eased.

• Market pricing for the Bank of Japan raising interest rates by a quarter point at the September meeting is stable around 45%.

• To reprice these expectations, investors are awaiting more data on inflation, unemployment, and wages in Japan.

US Dollar

The US Dollar Index fell by more than 0.2% on Monday, nearing a two-week low at 97.95 points, reflecting the decline of the US currency against a basket of major and minor currencies.

Focus remained on trade talks as the August 12 deadline set by Trump for reaching an agreement between the US and China approached.

According to CME’s FedWatch Tool: market pricing for a 25 basis point rate cut at the September meeting is currently stable at 88%, while pricing for keeping rates unchanged stands at 12%.

To reprice these expectations, investors this week are awaiting the release of the main US inflation data for July, which will clarify the extent to which higher tariffs have affected prices and the degree of inflationary pressure faced by Federal Reserve policymakers.