Yen moves in a positive zone on Japanese interest rate hopes
The Japanese yen rose in Asian trade on Friday on track for the second profit against the dollar, moving away from a two-week low on hopes for normalizing Japan’s monetary policies.
Recent Tokyo inflation data showed inflation rose past estimates last month, boosting the odds of a Japanese interest rate hike in March.
The yen is also boosted by a drop in US 10-year treasury yields before US retail sales data today.
The Price
The USD/JPY pair fell 0.25% today to 152.44 yen per dollar, with a session-high at 153.15.
The yen rose 1.05% on Thursday against the dollar, marking the first profit in four days and moving away from a two-week low at 154.80.
Inflationary Pressures
Earlier Tokyo data showed producer prices rose 4.2% y/y in January, the best pace since May 2023, passing estimates of a 4% rise.
It’s an indication of what consumer prices will likely show for February, as inflationary pressures increase on policymakers in Japan.
Japanese Rates
Following the data, the odds of a Bank of Japan interest rate hike in March rose from 70% to 75%.
US Yields
US 10-year treasury yields fell 0.25% today away from recent three-week highs at 4.660%, undermining the greenback.
It comes ahead of important US retail sales data later today, crucial for gauging economic performance.
The global markets are relieved that US President Trump hasn’t yet implemented his reciprocal tariff plan, with his trade officials indicating each country will be dealt with separately.
Wall Street climbs after data
US stock indices rose on Thursday as investors assess latest inflation data.
US producer prices surged 3.5% y/y in January, up from 3.3% in December, and above estimates of 3.2%.
US unemployment claims dipped to 213 thousand in the week ending February 8 from 220 thousand in the previous reading, beating estimates of 217 thousand.
Following the strong data, the Federal Reserve is likely to maintain interest rates high for the time being until inflation is heading sustainable once again towards the 2% target.
On trading, Dow Jones rose 0.3% as of 16:48 GMT, or 120 points to 44485 points, while S&P 500 rose 0.5%, or 32 points to 6084 points, as NASDAQ rallied 0.9%, or 178 points to 19828 points.
Oil prices plumb 2025 lows as Russia-Ukraine war approaches possible end
Global oil prices fell in American trade on Thursday, plumbing 2025 lows after a phone call between US President Donald Trump and his Russian counterpart Putin to negotiate an end to the Ukrainian war, which could lead the US to lift sanctions on Russian energy products.
Prices are also pressured by higher US crude stocks for the third week in a row according to official EIA data, in a negative sign for demand in the world’s largest fuel consumer.
Prices
US crude fell 1.3% to $70.25 a barrel the lowest since December 30, with a session-high at $71.28.
Brent fell 1.1% to $74.10 a barrel, a December 31 low, with a session-high at $74.97.
On Wednesday, US crude lost 2.7%, while Brent tumbled 2.5% on hopes for ending the Russia-Ukraine war.
The Russia-Ukraine War
US President Donald Trump said both Ukrainian and Russian presidents expressed desire for peace during separate phone calls with him.
Trump said he directed US officials to commence talks aimed at ending the war in Ukraine as quickly as possible.
Russia is the world’s third largest oil producer, and US sanctions on its crude exports following the invasion of Ukraine three years ago spiked oil prices in global markets.
The International Energy Agency said in its latest report that Russian oil exports will continue and expand if the United States sought alternatives for its latest sanctions announced under ex-President Biden.
US Stocks
The Energy Information Administration reported a buildup of 4.1 million barrels in US crude stocks last week to a total of 427.9 million barrels, while analysts expected a rise of 2.4 million barrels.
Gasoline stocks rose 3 million barrels to 248.1 million barrels, while distillate stocks rose 0.1 million barrels to 118.6 million barrels.
US Production
The EIA also reported an increase of 25 thousand bpd in US production last week to a total of 13.5 million bpd, cementing the US status as the world’s stop oil producer.
President Trump repeated last week his pledge to spike US oil production, raising concerns about production levels reaching new record highs this year and saturating the market.
